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

Thank you very much for taking your time. We would now like to begin oral presentation of highlight of E2086 from World Sleep 2025 oral presentation. This is a virtual session. Please check our website for presentation material. In Singapore this week, World Sleep 2025 was held. E2086 Phase I study results were presented in oral presentation. The highlight of the presentation will be given today, and questions will also be taken to deepen understanding of the audience of E2086. Presentation will be given by Dr. Katsutoshi Ido, Chief Scientific Officer. Dr. Ido, please.

Good morning, everyone. I am Ido. I assume the role of the Chief Scientific Officer in April. Thank you very much for joining us today. Since I joined the company in 2003, I have worked as a biologist in the research institute in Tsukuba and Cambridge in Massachusetts, focusing on neurology drug discovery. While in Cambridge, I was also served as the Head of the Biotech Investment division for [ 2 ] years, and I was appointed as CSO this spring. E2086, I will introduce today, is a compound we developed after -- while I was serving as a group head at Tsukuba Research Laboratories, and I am deeply attached to this compound. We recently presented findings on its wakefulness-promoting effects in patients with narcolepsy type 1 at World Sleep 2025, and I will now explain those results. Next, please. Before introducing the clinical trial results, I would like to explain our company's approach to orexin drug discovery. The compound E2086 introduced today acts on the orexin system in the brain. This peptide, orexin, is a neurotransmitter that activates the arousal center. It serves as a key regulator of wakefulness and sleep with high levels during the day and low levels at night during sleep. The relationship between sleep and wakefulness is sometimes compared to a seesaw as shown in the diagram below. In the brain, there is the sleep center, which is shown as a blue circle, that maintain sleep; and the arousal center, shown as the yellow circle on the right, that maintains wakefulness. During sleep, the sleep center becomes more active, while the arousal center's activity weakens. And the opposite occurs when awake to bring about the wakefulness by tilting the seesaw. Thus, the arousal and sleep centers mutually inhibit each other, tilting the seesaw towards one state or the other. Orexin plays a role in tilting this seesaw towards the arousal side. Therefore, if orexin becomes too strong when we are about to sleep, it tilts the balance toward wakefulness, leading to insomnia. Conversely, if orexin levels are deficient during the day, the seesaw tilts towards sleep causing daytime sleepiness. Our company has conducted over 20 years of research on this orexin system. Our first successful development was a receptor antagonist, DAYVIGO, as you see in the middle, it's a generic name lemborexant, which weakens the orexin tone at night to induce sleep, and it was launched in 2020. It currently holds the largest share in the market in Japan with the understanding by Japanese physicians of this mechanism of DAYVIGO, and it continues to expand further. Through the development of DAYVIGO, we established the platforms, including EEG recording system, orexin neuron deficient animal models and cell-based assay, et cetera. Now we initiated the E2086 project exploring the flip side of the coin, developing an agonist that stimulates orexin receptors. Unlike DAYVIGO, this compound directly acts on the underlying cause of narcolepsy, where reduced daytime [ orexin ] leads to sudden intense sleepiness. It is a concept where highly potent effect can be expected. However, searching for this agonist is far more difficult than searching for an inhibitor or antagonist. There was a major question of whether we could mimic orexin, a large molecular weight peptide. We began searching using multiple approaches, including high throughput screening from a library we constructed specifically for this project using our own compounds. After screening at that time 250,000 compounds, only 1 compound reached the final stage. Moreover -- well, usually, we have several compounds reaching the final stage. But at that time, there was only 1 compound that hit the final stage in this project. Moreover, this hit compound -- I was engaged in another project to create compounds that are created. And I thought that it was a serendipity type encounter of such a compound we discovered in the past. But this hit compound possesses a complex structure, a cage-like framework with stereochemically enriched, carbon enriched [ things ]. So it was a very complex synthesis. So featuring 3 or 4 chiral carbons, it's stereo-specific recognition requirements demanded an exceptionally intricate synthetic approach, we questioned whether it was truly feasible, yet this structure ignited our passion of Eisai's medicinal chemist. Within a year, they achieved over 10,000-fold increase in activity, and the biology team also developed an AI-based automatic EEG analysis system, enabling highly efficient screening of compounds, exhibiting the ideal profile for agonist with the potent efficacy and sufficient safety. As a result, we identified a development candidate with Eisai's unique chemical structure that demonstrated strong efficacy and sufficient safety in preclinical studies. As a unique company, developing both agonist and antagonist, we aim to contribute broadly to patients with sleep disorders. I believe that there is no such companies which are developing both. Next slide, please. Now I will introduce the trial results for the selective orexin receptor 2 agonist, E2086, in patients with narcolepsy type 1, which we presented at the World Sleep 2025 on Monday this week. Next, here is that introduction. There are several approved compounds to treat patients with narcolepsy type 1, but all of them are symptomatic treatments and do not directly address orexin deficiency, which is the underlying cause of NT1. E2086 that we discovered is a highly selective orexin 2 receptor agonist in preclinical in vivo studies. It demonstrated a dose-dependent promotion of wakefulness. Additionally, patients with narcolepsy type 1 experience cataplexy, where sudden temporary loss of muscle tone occurs following intense excitement of emotions. So it damages the patient's QOL a lot. Preclinical models confirmed that E2086 also mitigate cataplexy symptoms in a dose-dependent manner. Based upon these results, E2086 is expected to improve symptoms caused by orexin deficiency in patients with NT1 by promoting wakefulness via the orexin neuronal pathway. Next, please. The objective of this study, 101, was to evaluate the efficacy, safety and the tolerability of E2086 compared placebo and the existing drug modafinil in adult patients with narcolepsy type 1. This was the first clinical trial in patients or participants with NT1 for E2086, looking at the efficacy based upon a single dosing. And next, study design. This was a multicenter, randomized double-blind 5-period crossover Phase Ib clinical trial. The group composition consisted of 5 groups: placebo, 3 doses of E2086 this time, 5, 10, 25 milligrams were tested; and modafinil. As you see in the diagram below, which specifically shows how participants in the study received the investigation of drugs. For example, for patient 1, at the first visit in period 1, a single dose of placebo will be conducted. And then MWT will be conducted. After a 3-day washout period from the following day, a single dose of E2086 5-milligram will be administered in period 2. Another washout, followed by modafinil in period 3. After MWT and E2086 10-milligram in period 4 and E2086 25-milligram in period 5 to complete the study. Thus, the study is designed to evaluate the effects of a single dose of all 5 investigational drugs for each patient separated by washout periods. Ten different treatment sequences were prepared, and each patient was randomly assigned to one of those sequences. In each period, after undergoing overnight polysomnogram for comprehensive sleep assessment, the investigational drug was administered within 45 minutes after lights on the following morning, followed by a maintenance of wakefulness test. Next methods. Adult males and females above the age of 18 with NT1 diagnosis are the subjects. As for other inclusion criteria, please refer to the left side of the slide. On the right side, assessment of efficacy is shown, most frequently used method in narcolepsy study, MWT 40-minute test is used. MWT is short for Maintenance of Wakefulness Test -- this test -- Maintenance of Wakefulness. In this test, patients will be sitting on the bed in sleepiness-inducing environment, which is dark and quiet. Patients are instructed to remain awake and be seated quietly on the bed. But with narcolepsy patients, because of strong sleeplessness, in 5 to 10 minutes, they fall asleep. But how long wakefulness is maintained will be observed for up to 40 minutes. It starts from 2 hours after wake up in the morning in 40-minute session will be conducted 4 times at 2-hour interval. Polysomnography and EEG will be used comprehensively to make assessment of wakefulness. So this is an objective test of wakefulness. Another criteria is KSS, Karolinska Sleepiness Scale. This is a subjective scoring of sleepiness of patients. This is measured at the end of MWT at each time. Statistics used the mixed model, E2086 at each dose placebo or each dose of E2086 and modafinil were compared. Modafinil was used this time, and the purpose is to compare modafinil and placebo to confirm the sensitivity of the assay. Adverse events data were collected throughout the whole period. This is the demography. This is the demographic statistical characteristics and baseline characteristics of groups subject to safety analysis. 22 were randomized, and 19 completed the tests. 21 undergone safety assessments, 42.9% were female, 47.6% were [indiscernible]. Next, turning to the results of the study. This is a very busy chart, but next page will show easier-to-understand graphical presentation. The lower part of the chart in pink box shows individual sleep latency measured 4 times in a day. Sleep latency is the time it takes before patient falls asleep. And the top pale blue box is the average from 4 trials. This is a busy chart, and please look at the next slide. But regarding this slide, one point about modafinil. In modafinil sleep latency is significantly longer in comparison to placebo confirming the sensitivity of this test. Next, this is a graphical representation of the previous chart. And this is the most important slide in the oral presentation this time. There are 4 measurements of MWT. As I've described in the methods, after administration of the drug, MWT tests were measured 4 times. The vertical axis is sleep latency, the time until a patient falls asleep. In a sleep-conducive environment, participants are trying not to fall asleep. And efficacy is measured by how long sleep latency can be extended. So the taller the bars, the better the results that we expect to see. And in placebo, often times, in 5 to 6 minutes, patients fall asleep. In comparison to that, the black bar showing -- the white bar showing placebo and pale blue, pink and green are E2086 5, 10 and 25 milligrams in all 3 doses in comparison to placebo. And in comparison to even modafinil, we were able to confirm that sleep latency is significantly longer. And in all 4 trials in E2086 stating from 5 milligrams showed significant extension of MWT in comparison to placebo. At the [ fourth ] trial, it means that even after 7 hours after administration, efficacy is maintained. At 10 and 25-milligram, the MWT is extended more significantly than modafinil. Vertical axis is sleep latency as I mentioned earlier. Competitors graphs often have minds at 20 minutes. When healthy subjects go through this study, the 10th percentile have a lower limit of about 20 minutes. So 20 minute is considered a lower limit of normal range. Oftentimes, in the lowest dose, 5 milligram, in the last trial, the trial 4, normal range was maintained. And at 10 to 25 milligrams, the average level of 30 minutes in healthy subjects is exceeded. Even after trial 4, looking at individual tests 5, 10, 25 milligrams in all of the arms and especially in comparison to a lower dose in the mid-dose and in comparison to mid dose. In higher dose, patients stay awake even beyond 40 minutes. Strong arousal effect is observed. Patients who fall asleep in 5 minutes without the drug can be -- can stay awake up to the normal range of sleep latency as seen in healthy subjects. This is a similar type of chart showing KSS score, Karolinska Sleepiness Scale. Earlier, MWT showed objective assessment of wakefulness using polysomnography. In case of KSS, this is a subjective assessment of sleepiness by patients themselves. The top blue boxes, the average of 4 trials, the bottom pink box shows results from each trial. Looking at modafinil, in comparison to placebo, KSS is significantly lower. In this scale, assay sensitivity once again is confirmed. This is the graphical representation of KSS scores. The vertical axis, well, in this study, the current sleepiness intensity is scored from 1 to 10 by participants, 1 is extremely awake and 10 is extremely sleepy or falling asleep all the time. In between 1 to 10, the patients are asked to score, and the lower the number, the more wakeful the patient is, meaning the drug is more effective. In the red boxes, E2086 at 5, 10 and 25 milligrams are increasing daytime wakefulness significantly in comparison to placebo. And 10 to 25 -- and 10 and 25 milligrams also are showing statistical significance over modafinil. And looking at Trial 4, similar to earlier chart, at the very last trial, sustained effect is shown from subjective feeling of sleepiness of patients. This is the safety summary. E2086 was generally well tolerated. Most TEAEs, or treatment emergent adverse events, were mild to moderate in severity. There was a dose-related trend, but there were no discontinuations due to TEAEs and no serious TEAEs reported. Most frequent TEAEs were increased urinary frequency, nausea, dizziness and urinary urgency. In terms of clinical chemistries, including liver function tests, there were no items of concerns, and there were no clinical trends of concern, including in blood pressure and heart rate and no visual abnormalities were reported. So well -- it was confirmed that E2086 was well tolerated. This is the conclusion. These data demonstrate that once daily dosing of E2086 has the potential to improve daytime wakefulness in NT1 patients. All doses tested of E2086, 5, 10, 20 milligrams, significantly reduced EDS versus placebo and modafinil as objectively measured by the MWT. All doses of E2086 significantly reduced EDS versus placebo as subjectively measured by KSS. At 10 and 25 milligrams, KSS scores were significantly more reduced than modafinil. Dose-dependent trend was observed in TEAE incidents, but E2086 was generally well tolerated. This is the final slide, and this is the final conclusion. E2086 is an orexin receptor agonist that was discovered and is being developed by leveraging the strength of Eisai's orexin platform, particularly the experience and knowledge gained from the discovery research of the orexin receptor inhibitor, DAYVIGO. This compound, E2086, was shown to significantly reduce excessive daytime sleepiness compared to placebo and existing medication, modafinil, when administered once daily in patients with narcolepsy type 1. In particular, as shown earlier, strong potency of sleep latency of more than 40 minutes were observed in many patients, and effect was shown to be sustained. And we believe that this is a very promising profile. And at the same time, the doses are showing efficacy. Good tolerability and safety were demonstrated. And no liver function disorder or visual abnormalities were observed. As for development plan going forward, not only in narcolepsy type 1, but including narcolepsy type 2, we plan to start Phase II study within the fiscal year. As for submission filing, we are targeting to file submission in fiscal 2028. We would like to apply good ideas to the protocol to accelerate this time scale -- time schedule. Thank you very much.

Now we would like to open the floor for Q&A session. We'd like to receive questions from analysts and investors, and then that will be followed by the Q&A session from the media. [Operator Instructions] First, from Citi Securities, Ms. Yamaguchi, please.

Can you hear me?

Yes, we can.

This is Yamaguchi of Citigroup Securities. My first question is 21 participants were included. And with that, I believe the data demonstrated very high efficiency -- effectiveness. And you said that the 5, 10, 25 milligrams doses were utilized, and there were no side effects, serious ones. So do you think that there will be further doses to be utilized in Phase II onwards? But do you think that 1 of these 3 will be selected?

Currently, the plan for Phase II trial is now being finalized, but we are not able to give you any details. But modeling simulation will be utilized inclusive of higher doses for this particular compound. So we would like to provide appropriate dose setting for type 1 and type 2 patients. We would like to design study as such.

My brief question. Regarding the adverse events, I thought that the incidence of insomnia was low. So it's the flip side of the coin. So I saw that after listening to your explanation and other company's compounds, I believe that there will be a higher incidence of insomnia. So could you please explain why it was the case in this results?

Thank you for your question. We evaluated efficacy until the 7 hours after the start of administration. So for about 7 hours, efficacy continued. Whether or not insomnia occurred or not should be evaluated looking at the test results from -- during the night. And then according to PK, the efficacy will discontinue or the binding may be considered, and we assume that there is the discontinuation of the efficacy. And lemborexant, we were very careful about the PK. When we conduct a development of the sleeping drug, and I think that this is the most important point. And these results, I believe, is leading to the ideal profile what we are trying to achieve. Well, I think that the drug was taken in the morning. And then the efficacy will continue. And then when they go back at night, the efficacy discontinues.

Next, Mr. Wakao from JPMorgan Securities.

This is Wakao from JPMorgan. Can you hear me?

Yes, we can.

First question is about key adverse events. Increased urinary frequency and urinary urgency in orexin agonist, these are on-target adverse events. I understand that very well. These are characteristic adverse events of orexin agonist. But unique to this compound, dizziness and nausea are adverse events not seen in other drugs. And what are your views? Do you think that these are manageable? And if these are not on target, is this due to this specific compound?

Thank you, Mr. Wakao for your question. As for adverse events observed in this study and as shown here, these are mild to moderate in severity in majority of the cases and these are not at all severe. That is one point. On target or not, in the Phase II study, we would like to closely look at that. As for the studies of competitors' drugs, there are some signs such as lack of balance. In developing CNS drugs, lack of balance and nausea, depending on how patients feel, these are signs that are often exhibited. Inclusive of these, we would like to closely examine in Phase II study. But in any case, these are transient and disappear. So we do not believe that these are serious.

I see, I understand. Looking at dizziness and nausea, it is lower in incidence in 10, but higher incidence in 25. And it looks like 10 milligrams is the optimal dose, but there were earlier answer that you might consider increasing the dose. So these adverse events are not so serious.

That is our view.

And one more. And the second question. Takeda is ahead in development. Their dosing is twice daily, and they say that the benefit of twice dosing -- twice daily dosing is that they can mimic the circadian rhythm of orexin. And regarding this concept, what do you think? And if that is ideal, then your once-daily dosing potential, can that mimic the circadian change?

Thank you for your question. As for once-daily potential of our compound, in order to improve patients' QOL, we believe that this is a more suitable profile in our view. As you rightly pointed out, orexin has a circadian change or diurnal change, and it will be higher in daytime. If we cannot mimic this diurnal rhythm, is there any QOL that cannot be achieved? To the extent that I know, there's not much during the sleep. If sleep is forced, sleep rhythm may be out of sync. But in questionnaire, we do not detect any discomfort. So once a patient becomes fully awake in the morning and engaged in activities during the day and the effect wears off at night, this means that a patient will have a good drug adherence or compliance. So I believe our benefit is strong.

You will be the third or fourth to introduce a drug in this indication. How much differentiation you can make from the existing drugs will be quite important. What are the points of differentiation? As far as I've listened today, it seems that safety and efficacy. So I think you will simply be pursuing best-in-class.

Thank you for your question. As you pointed out, I believe there are mainly 3 things. First is, as you mentioned in your question, once daily dosing. Narcolepsy patients, in terms of attentiveness, attention, oftentimes their scores tend to be lower, and they may forget to take a drug. So once daily to keep wakefulness can be a huge benefit. And another point you've also mentioned, which is safety. Many patients are able to stay awake beyond 40 minutes, and this is a single dosing study. So we cannot make a simple comparison. But what we have come to understand is that in comparison to competitors, we can be hopeful that adverse events are fewer. So in a broad range of doses, we hope that the drug can be used by both type 1 and type 2 patients. And the third is efficacy. At 5 milligram, even at 5 milligram, beyond 20 minutes, patients stay awake. So wakefulness of healthy subjects can be achieved, and we believe that this can become a best-in-class compound.

Next, from UBS Securities, Mr. Sakai.

This is Sakai speaking from UBS Securities. This is a very basic question. There may be some data shown in the slide, but serum concentration TMAX or half-life. Could you please comment on this? How much they are?

Thank you for your question. I think at the previous -- last sleep conference, I think data were presented, but I think that the active compound will disappear in half a day. I mean, half a day during the day. So that is the profile of PK.

Half a day during the daytime. So that means 6 hours?

Roughly speaking, yes, that is the ballpark.

And then once daily dosing and efficacy can be maintained. Is this the message you would like to deliver?

Yes.

Understood. Then -- so it's a basic question. Well, for patients with narcolepsy, orexin-based drug will continue to be taken. And then do you think that the activity of orexin will be enhanced? I mean, withdrawal can be possible in the future? Are you going to -- how are you going to verify and examine that?

Well, thank you very much. It's a very interesting question. Going forward, inclusive of the long term, the multiple dosing studies in narcolepsy disease, the neurons, which are emitting the orexin are disappearing. Therefore, in this disease, there is no signs for emitting the orexin anymore. So in principle, the patients have to continue to take this drug.

Understood. Right. Long-term study will be done from the time Phase II study will be started. The long-term study will be also initiated at the same time?

Well, at the same time with the Phase II study.

So after completion of Phase II. And then if patients are going to enrolling into the long-term stability study?

It's inclusive of that point. We like -- we are now working on the protocol and a plan for the future studies so that we will be able to file as soon as possible for approval. So we would like to disclose such information as soon as that gets available. Thank you very much.

Next, Mr. Muraoka from Morgan Stanley.

This is Muraoka from Morgan Stanley. I'm not able to digest fully various data, this drug E2086. As for drug-drug interaction or [ SIT ] with other drugs in combination use, is there anything that we should be concerned about?

No. No such concerns.

I see. In today's presentation and recently, Takeda also gave a presentation. Looking at these overall my impression is that Takeda is able to launch the first. So it will be able to lead even though it's twice daily. Your company's compound is well balanced in terms of safety and efficacy. So even though it did come out it looks very good, and Alkermes has a blurred vision, and it seems that it is least promising. That is my impression. Is it a similar perception that you have in terms of positioning of the 3 drugs?

Thank you for your question. I'm not able to offer detailed comments on competitors' drugs, but in terms of benefits, we believe that our compounds have the benefits that I've described earlier. The main efficacy includes efficacy on cataplexy. If this is confirmed in Phase II, we believe that this drug will become the most used drug in patients, and we do not have a blurred vision problem as observed today.

NT2 will be included in Phase II, as I understand. As for those in Phase I, it was up to 25 milligram. In your gut feeling, how high do you think you can go in dose?

Thank you for your question. It may sound repetitive, but we have a modeling simulation team, which is quite strong and capable. Based on the results from this study and also publicly available study, and we have already confirmed that we can go higher in dose. So we believe that we can go to higher dose that can be effective in NT2, but I would like to refrain from commenting on specific dose in numerical terms.

I can understand that. But in order to make it effective in NT2, do you have to go to as high as 50 milligram to quite high dose?

On that point, we will be conducting simulation. The point that you've raised, meaning for NT2, those may be higher. Looking at the past situation, dose twice or 3x as high starts to be effective. And in preclinical data of ours, that is what is suggested. And we believe that we can go to that level with our compound. Thank you very much.

Next from Goldman Sachs. Ueda-san, please.

This is Ueda speaking. I'm from Goldman Sachs Securities. I would like to ask about the MWT profile that you are aiming at. What is the need for that? This time, 5-milligram arm, there was an extension of over 19 minutes, as you spoke. So for over 20 minutes for a healthy range, do you think that it is enough target? Or as you said earlier, 10, 25 milligrams for extension of over 30 minutes, which will be necessary? Or would you like to see the efficaciousness lasting until 40 minutes? And according to other companies' explanation, if you reach the 40 minutes and then it is too efficacious, but there is no incidence of insomnia, so then 30 minutes or 40 minutes, stronger efficacy compared to other companies. Is this something that you are aiming at? Could you please give us your take?

Thank you very much for your question. As you summarized right now, for healthy volunteers, mean value was 30 minutes. So according to the compound profile, although we have just tested the single-dose studies, but I believe that we would like to first -- verify that first. As you commented, if the time extension reached the 40 minutes and then we believe that we are able to reduce the dose for this compound. So then we will be able to make adjustments by reducing the dose of the compound. And in terms of the durability or sustainability. For example, when away back from the office home and then during the driving 20 or 30 minutes have to be maintained. And one, this should be the profile that we'd like to achieve by once-daily administration.

Second question is about strategy for developing this compound going forward. In this area, there are several competitors which are ahead of you and your company. You have a strong share for DAYVIGO in Japan. And thinking about the franchise, thinking about players outside of Japan. Are you going to think about the standalone development? Or are you also considering the partnership with other companies in development?

Thank you very much for your question. Our goal is to deliver this therapy for as many patients as possible as early as possible. So if there are any partners who can empathize with this goal, so we'd like to be very open and flexible in considering the potential collaboration.

Next, Ms. Sogi from Bernstein Securities, please.

I have 3 questions. About -- first about MWT. In Phase I study up to 7 hours, you are assessing efficacy. Based on the results of our and considering half-life, how many hours per day can the drug stay effective? Dr. Ido, you've said that a patient should be able to stay awake even when they are driving home. So with once daily dosing, how long will efficacy last? How many hours?

Thank you for your question. This time, 7.5 hours. After that, assessments were made, and we would like to confirm details in the future studies. The trial 4 on this page, scores are similar to the start of the administration. And looking at the half-life, we believe that the scores or wakefulness can be maintained through to the evening.

Second question is on modeling simulation. Between narcolepsy type 1 and type 2, I think you are looking at different pharmacodynamics. In narcolepsy type 1, clearly, orexin level is lower. In narcolepsy type 2, orexin level, it may not be completely normal, but profile may be quite different from narcolepsy type 1. In modeling simulation in particular, how do you plan to simulate looking at the differences between NT1 and 2?

That is a very good question. We also consider that to be a very important point. First, as objective data, in narcolepsy type 2, we have reported values of efficaciousness, and we are able to utilize that data. Another point is what we are doing on our own called QSP. Looking at pharmacological study from preclinical studies, based on preclinical model, we will be applying in the simulation. So we can take these approaches at the same time in the simulation.

I see. I understand. Basically, this drug and orexin receptor interaction will be studied. And so you will be looking at that for both NT1 and NT2.

Once again, thank you for a very sharp question. Sensitivity cannot be fully explained only by bonding. And I think our strength is that we are able to incorporate that aspect as well.

This time, idiopathic hypersomnia, IH, development plans were not mentioned today, but what is the view of the company? This IH is different disease from NT1, NT2, but what is the view of Eisai on IH?

Thank you for that question. First, we would like to focus and concentrate on narcolepsy. So currently, we are looking at type 1 and type 2. But as you pointed out, given the mechanism, we believe that there is potential, including IH. In addition, with the orexin platform, going forward, we would like to better understand how orexin is involved in a wide range of diseases, including neurodegenerative study, and we are conducting detailed analysis of this. Once narcolepsy -- in narcolepsy, efficacy is demonstrated in Phase II, we would like to once again consider the widening of indication.

From Daiwa Securities, Mr. Hashiguchi.

This is Hashiguchi from Daiwa Securities. First is the basic question. As you explained crossover design was adopted. What's the objective of adopting this design? And by having this design and compared it to the studies without crossover design, in terms of interpretation of the data, what is the point? What are the points that you have to take into account?

Thank you very much for your question. This time, crossover study design was adopted. The reason why we chose it is each patient that will be able to experience all 5 drugs or investigational drugs. There will be an effect of controlling variation fluctuations. The profile of the patients may vary. Therefore, within 1 single person, we are able to see the results. And we have 5 arms with 20 patients, and it used -- there should have been 100 patients. But with this study design, it could be contained to 20 patients. Within this group, we were able to show and demonstrate the significant difference. And I think it was a good way to have the significant difference in an efficient manner. Regarding your concern, yes, we are looking at that and the washout period was determined as 3 days. Based upon the earlier simulation and also the PK data in advance. We confirm that when the efficacy or exaggeration can go back to the original baseline level. And after conducting analysis on the results of the administration, there was no carryover effect from the previous dosing. And in generally speaking, clinical trial, this is not something that we have done on by ourselves. I believe that this is one of the study designs which are widely adopted.

Based upon this study, I believe that there may be potentially obtaining additional data from this same study. For example, a longer follow-up period of data and also data on the other evaluation items endpoints. I think that, that data to be presented for now is limited to what you have presented today.

Thank you for your question. This is Study 101. Broadly speaking, the data sets that we are able to present are limited to what we presented today, but we have taken the blood samples as well. So there may be, as necessary, additional studies on that. But in principle, there will be no further long-term data from this design.

Based upon that, regarding the partnership, what do you think will be the timing for you to consider a partnership? Could you please give us your input?

According to the information meeting held in March, CEO, Mr. Naito, mentioned that the data necessary for a partnership will become available in 1 or 2 years. So that is what the company wants to do, he said.

In 1 or 2 years, that timing has not come, but rather than based upon this particular data sets, but the data which will be derived from the next trial, Phase II, will be the foundation for considering the partnership. Is this something that we should think?

Thank you for your question. The data is something that we are able to call POC, proof of concept. So utilizing even this data, we will be able to consider such a negotiation for potential partnership as an option.

Next, Mr. Wada from SMBC Nikko Securities, please.

This is Wada from SMBC Nikko Securities. Can you hear me?

Yes. Yes, we can.

Regarding compound, I have 2 questions. First, this is a unique compound including its [ stereo ] structure. Is there going to be any issue in manufacturing? For example, mass production may be difficult or cost could be higher. Is there any negative issues? As for positive point, such compound, in what way, were you able to come up with such a unique compound? And with such unique compound, can it be used for other targets?

Thank you for your question. So first question, we have no concerns. Looking at the past history, we have dealt with naturally derived compounds with many asymmetries. And so based on that track record, we believe that we will be able to manufacture this compound without any problems. And the second question, we believe that there is a possibility. I have explained the history of this compound in the beginning of my presentation. This was not a compound brought from outside. This was found as we were exploring other things. And from the hit compounds on the orexin platform, we were able to consider other compounds in addition to what initially developed. So in that sense, I think there is a potential for broad application.

In the interest of time, we would like to start receiving questions from the media. Participants from the media, if you have any questions, please raise your hand. [indiscernible], I think you were raising your hand earlier. [indiscernible], if you're still with us, please start asking your question now.

Congratulations on fantastic data. This is really exciting. I just have 2 quick questions. And the first being, I wonder if perhaps Dr. Ido can say a bit more about tolerance of the compound over time given that its long-term therapy? And then secondly, if you could speak a little bit about [indiscernible], I know it's very early, but access globally has become -- access to payers has become an increasing issue and especially at IH. I wonder what is the issues overseas, but also in Japan for limits to prescribing. As you know, [indiscernible] in Japan is not prescribable by GPs, for example. And I wonder if there will be any preauthorization requirement or perhaps scheduling of the drug, in other words, DEA schedule in the United States to be observed. Congratulations again.

Thank you very much for your question. Regarding the tolerance. Going forward, we will conduct the long-term studies and -- in which we would like to observe closely. And in the preclinical data, we have observed that data demonstrating the efficacy and the dosing where the efficacy is confirmed, there hasn't been any issues with the tolerance. So I don't think that there will be an issue with the tolerance. But once again, if I may repeat, I would like to closely observe what will be the situation in the long-term studies going forward. And regarding the schedule, your second question. Based upon the mechanism of this drug, orexin 2 -- receptor 2, we do not believe that there are any big concerns about the scheduling. But of course, this is about the CNS compound. So regarding the concern, it's going to be one of the core batteries in the study design. So we would like to demonstrate that there is no such concern in our studies going forward.

So you do not consider any kind of addictive potential or any studies to assess that?

Well, currently, if there are no concerns, and then we do not believe that there is a necessary new studies to be conducted. But based upon the results from the core battery, we will start the consultation with the regulatory authorities.

Congratulations again.

Thank you very much for your active participation with many questions. We would now like to close the briefing session on highlights of E2086 oral presentation at World Sleep 2025. When you close the Zoom window, there will be a questionnaire. It will take only a couple of minutes. We appreciate your feedback, and thank you very much for participating. [Statements in English on this transcript were spoken by an interpreter present on the live call.]