Takeda Pharmaceutical Company Limited (4502) Earnings Call Transcript & Summary

Thank you very much for joining us today for Takeda's Online Disease Seminar despite your very busy schedule. I'm the master of ceremony today, my name is [indiscernible] from IR. Thank you very much for this opportunity. Allow me to explain about the language setting for today's program. [Operator Instructions] I'd like to remind everyone that we will be discussing forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those discussed today. The factors that could cause our actual results to differ materially are discussed in our most recent form 20-F and in our other SEC filings. Please also pay attention to the important notice indicated on the second page of the presentation material today. Today, for the presentation as well as the Q&A, we have from Japan Medical Office, Rare Disease Medical Expert, Gen Suzuki. Rare Disease Medical Franchise, Medical Office, Medical Unit Head, Sanghun Iwashiro are joining us. And we would like to ask Suzuki Gen to give a presentation first. Please find the materials in front of you, which should be disclosed on our website by now, please download the file. I would like to hand over to Suzuki Gen.

Thank you for the kind introduction, [indiscernible] and very nice to meet you all. My name is Suzuki. I'm a medical expert at the Japan Medical Office. I work in Rare Diseases at Takeda, but I also see patients at the Internal Medicine Clinic. My specialty originally was Cardiology. And I was previously an Associate Professor in the Department of Cardiology at the State University of New York School of Medicine for about 20 years involved in clinical and basic research. I really appreciate this opportunity. Today, presentation is about Gaucher disease, Fabry disease and Hunter syndrome. But before that, I would like to introduce what lysosomal storage diseases? Next slide, please. First, I would like to give you an overview of lysosomal storage diseases. It will be starting from Page 4 of the slide deck. And first, let me explain about the Lysosome. Lysosome is a 0.1 to 1.2 micrometer organelle, discovered by Belgium Researcher, Christian de Duve in 1955. It was found to be an organelle, mainly found in liver cells and leucocyte cells where intracellular degradation products were processed. However, it is now thought to have other functions besides that, such as endocytosis, autophagy and salvage as well as cellular metabolism and homeostasis [ and enlarge the image of cell organelles ] and lysosomes, as shown at the bottom of the slide. As shown on the right-hand side, image, normally in the lysosome, hydrolytic enzymes are shown in green, breakdown substance called substrate presented by the small blue circle. In this figure, only one lysosome is magnified, but there are actually to 50 to 1,000 lysosomes in each cell. Next slide, please. Lysosomal storage diseases, LSDs are caused by congenital deficiency of the hydrolytic enzymes indicated in green, leading to the intracellular accumulation of intermediate metabolites existing in the decomposition process of the substrates indicated by the blue circles in the previous figure. That should be metabolized by lysosomes. This accumulation triggers intracellular abnormalities, such as abnormal vesicular trafficking shown in blue, impaired autophagy, abnormal intracellular signal transduction, abnormal electrolyte and especially calcium balance and abnormal energy regulation by mitochondria. Thus, the accumulation of substrate and intermediate metabolites in the cell causes the cell to fail to function properly and the symptoms appear in the various parts of the body. And can you guess when it is discovered? Go to the next slide, please. This is Slide 7. The slide shows the evolution of the discovery and the treatment of LSDs. In fact, LSDs have been reported for a long time with reports of patients with Gaucher disease, Fabry disease, Hunter syndrome already from the 1880s, more than 130 years ago. Currently, the standard treatment for these diseases is mainly enzyme replacement therapy, ERT. However, it was not until the 1990s, about 30 years ago that ERT and other treatments were actually initiated. LSDs are also characterized by their hereditary nature. The next slide will show you the inheritance patterns. Many of the inheritance patterns of lysosome diseases. On the left, you find autosomal recessive inheritance pattern and X-linked inheritance pattern. For autosomal recessive type, when both parents are carriers of the mutation, then the child will have a 25% probability of the disease onset. In X-linked inheritance, when the mutation is on the X chromosome of the mother, then the mother and daughters with 2 X chromosome [indiscernible] carriers, but the son with one X chromosome may develop the disease, but it cannot be generalized even with the same mutation, onset disease type and disease cause may be different. You need to monitor carefully the disease cause. For the details, I would explain later more in detail when I explain each disease. Next slide, please. This is a list of lysosomal storage diseases. There are 31 LSDs considered as designated intractable diseases and Takeda's products contribute to the ones in red, Gaucher disease, Hunter syndrome and Fabry disease. I will explain each disease today. In the next slide, I will explain intractable disease designation in Japan. In Japan, lysosomal storage disease is considered as intractable disease or specified pediatric chronic disease subject to the National Health Subsidy. As shown here, intractable disease means mechanism is not clear. Therapy is not established. Rare disease requiring long-term care. And for specified pediatric chronic disease, it has a chronic disease progress life threatening for long term. And these symptoms and therapies go for long-term undermining QOL and medical expenses burden remain high for a long time. Lysosome therapies are not always inexpensive, but because of the designation, the cost required for therapy can be subsidized as a part of National Health Care System. What are specific therapies, I will explain very representative ones in the next slide. Slide 11. This summarizes lysosomal storage disease, as I have explained to you this disease is caused by intermediate metabolite accumulation. So the main purpose of the therapy is to correct enzyme activity to degrade substrates. The first choice is ERT or enzyme-replacement therapy, defect enzymes are directly administered to degrade substrate in the lysosome. The second is HSCT, donor-derived hematopoietic stem cells transplanted to produce enzymes. However, you need to continue immunosuppressive therapies. And we have nowadays ERT. So only limited patients receive this therapy. The third is substrate reduction therapy, and that is to control the synthesis of substrate, to control accumulation in the liposome. And the fourth is Chaperone therapy that is to stabilize the [indiscernible] of the enzyme to normalize enzyme activity. The fifth is gene therapy. The genes are corrected to have normal enzyme activities. I explained the 31 LSDs. And for each indicated therapies are different slightly. I'll explain later in each section. Here is the summary of the lysosomal storage diseases. Page 12, please. Here is a summary. Lysosome storage diseases are inherited metabolic diseases caused by deficient lysosomal enzymes, characterized by the accumulation of substrates and Gaucher disease, Fabry disease and Hunter syndromes are LSDs and there are 31 types of lysosomal storage disease specified as intractable diseases. Lysosome storage disease was confirmed about 130 years ago, and ERT started about 30 years ago. And the purpose of the treatment is to normalize enzymatic activities to degrade substrate to improve pathology. There are several therapies available. And in the next slide, I will explain each disease and therapies. I would like to explain about Gaucher's disease. Please see Page 14 in the handout. Gaucher disease is caused by the deficiency of reduced activity of glycolipid hydrolase, glucocerebrosidase. This enzyme is necessary for the breakdown and recycling of ceramide, which is a component of cell membrane. And this disease was discovered by French physician, Philippe Gaucher in 1882. The mode of inheritance, which will be explained on the next slide is autosomal recessive. With the mutations in the glucocerebrosidase gene, GBA1, on the first long arm of the autosomal chromosome causing the enzyme abnormality. Prevalence of Gaucher's disease is approximately 1 in 330,000 in Japan, with about 150 patients currently diagnosed in this country. The actual number of patients diagnosed is lower than the calculated number, which should be around 400 patients. Outside of Japan, on the other hand, the number is 1 in 800 in Ashkenazi Jews and 1 in 40,000 to 60,000 in non-Jewish Europeans. The picture on the right shows a 4-year-old patient with type 1 Gaucher disease. As you can see, the patient has markedly distended abdomen. This shows hepatomegaly, which is optimal swelling of the liver, which is one of the characteristic symptoms of Gaucher's disease. Next slide, please. This slide provides an explanation of autosomal recessive inheritance. As explained in the previous overview, Gaucher's disease is inherited in an autosomal recessive form. And when both parents have mutations in the glucocerebrosidase gene, there is a 25% chance that the child will show symptoms of Gaucher disease. As autosomal chromosomes are in pairs, a carrier with a [indiscernible] only will not show the symptoms. In this diagram, the parents and their 2 children would be carriers. Next, I would like to introduce the mechanism of Gaucher disease. Page 16, please. This is a description of the mechanism of Gaucher disease. As shown, it is caused by a genetic mutation of glucocerebrosidase, GBA1 that results in reduced activity. As shown in the chart on the left, Gb1, and intermediate metabolite produced during ceramide degradation, accumulates in cells, such as monocytes and macrophages, which in turn cause liver and spleen enlargement, anemia and thrombocytopenia. It also causes bone pain, pathological fractures of the bone marrow. And as shown in the chart on the right, when glucosylsphingosine, lyso-Gb1 secreted by monocyte, macrophages accumulates in the brain, it causes central nervous system disorders. Next slide, please. According to the mechanisms shown on the previous slide, the main clinical manifestations of a Gaucher disease include enlargement of the liver and spleen and increased [indiscernible] function. And as shown in the bottom left of the picture, the thrombocytes and the erythrocytes would be destroyed, leading to anemia and thrombocytopenia. It also causes reduced bone density, bone deformations and bone pain. And the central nervous involvement, as shown at the top left, may result in delayed psychomotor development, horizontal eye movement disorder, convulsions, myoclonus, dysphagia, as well as epilepsy. Therefore, Gaucher disease is a disease that causes enlargement of the liver and spleen, bone abnormalities and a variety of neurological and hematological symptoms. On the next slide, I would like to explain the specifics of the bone symptoms. This is Slide 18. As an example of clinical manifestations of this disease, I would like to explain the bone manifestations. Picture on the left is an MRI T1 weighted image, showing the morphology of the femur bone. Thinning and deformation of the cortex of the femur has resulted in a triangular flask-like deformation on the end of the femoral bone as shown in the red box. In the middle, you can see thinning and -- in the bone cortex. This is due to infiltration of mononuclear Gaucher cells with glucocerebroside deposits. Due to these bone symptoms, growth retardation and short stature observed in childhood, as shown on the right. The clinical presentation of Gaucher disease is classified from left to right, according to the presence or absence and severity of neurological symptoms. Type 1, non-neurologic. Type 2, acute neurogenic. And the Type 3 subacute neuro. Type 1 is capitalized by the absence of neurological symptoms and can occur at a wide range of ages from infancy to adulthood. And main complaint is hepatomegaly and splenomegaly as well as bone symptoms but severity varies. Type 2 develops in infancy and progresses rapidly with hepatosplenomegaly, developmental delay and neurological disorders such as convulsions. And Type 3 is from infancy to school age and is associated with neurological symptoms such as abnormal eye movement, ataxia and convulsions in addition to hepatosplenomegaly, but it's all mild and the progression is set to be slower than type 2. And in this section, we present data of the distribution of Gaucher disease types 1 to 3 in Japan and the rest of the world. This is a comparison of the distribution of Gaucher disease types between Japan and the rest of the world. As shown in the pie chart on the right, according to a 2010 report by the Gaucher Registry, an overseas registration system for patients with Gaucher diseases, 92% of registered patients were type 1 and 1% were type 2 and 7% were type 3. In the [indiscernible] of Japanese patients as shown in the pie chart on the left, 41.8% were type 1. And more than half, 58.1% were type 2 or 3 with neurological symptoms. Although it's not shown here, it is known that the distribution of disease types differs between overseas and Japan because even in the same site mutation, the portion that DNA sequence mutated differs by race. In the Japanese distribution on the left, you may notice that the type 3 in pink is divided into 2 parts. I will explain this point in more detail on the next slide. Next slide, please. Slide 21. This slide shows the changes in the types of Gaucher disease in Japanese patients. The pie chart on the right is the same as the one shown on the previous slide. But if you compare it with the distribution at the first visit on the left, you see that the distribution of types 1 and 3 has changed. This indicates that during the follow-up period, there was a change from the disease type of diagnosis to other types. In a survey of 129 Japanese patients with Gaucher disease, 28 patients were diagnosed with type 3 at the time of first visit. But this number increased to 44 after follow-up with 16 cases changing from type 1 to type 3. Thus, we know that there are cases in which neurological symptoms are not present at the time of diagnosis. But during the follow-up, resulting in the transition from type 1 to type 3. I will now talk about the diagnosis on the next slide, Page 22. This summarizes the diagnosis of Gaucher disease. In addition to the clinical manifestations, as previously described, the diagnosis of Gaucher disease is confirmed by low levels, less than 10% of normal of glucocerebrosidase activity in skin fibroblasts, blood and bone marrow. Measurement of Lyso-Gb1 levels has also been reported to be useful in monitoring disease progression and response to treatment and is currently being studied in Japan. Angiotensin converting enzyme, acid/alkaline phosphatase, chitotriosidase and the ferritin levels are also useful as the ancillary diagnostic tests. Identification of Gaucher cells like -- as you can see here on the right, large macrophages that accumulates and stay in the blue in tissues [indiscernible] and bone marrow tissue samples or genetic testing to identify gene mutations in DNA can also be useful in disease classification. As you see the diagnosis of a Gaucher disease is based on clinical symptoms as well as a decrease in glucocerebrosidase activity. Although the diagnostic procedure is relatively established. Patients are not necessarily diagnosed with Gaucher disease as soon as symptoms develop. Please turn to Page 23. In fact, we know that the patients with Gaucher disease are not being diagnosed in a timely manner. As noted in the upper portion of the slide in gray, the average delay in diagnosis in type 1 Gaucher disease was 4 years and the number of physicians seen before definitive diagnosis was approximately 3. The physicians who made the diagnosis was specialized in Hematology, Pediatrics, Primary Care and Internal Medicine. The main symptoms was splenomegaly, thrombocytopenia, anemia, hepatomegaly and also articular pain. The delay in diagnosis was due to lack of disease awareness, misdiagnosis and no specific symptoms. This suggests that early diagnosis and early treatment of Gaucher disease requires an increase in awareness of the disease. Please go to the next slide. Here has one example to promote early diagnosis, I present an initiative taken in Japan. In Japan, neonatal mass screening for early diagnosis of inborn errors of metabolism is currently conducted in each local government for the diseases shown below right in the green square. Some local governments have begun to include lysosomal diseases, like Gaucher, Fabry and so on, a neonate mass screening. I mentioned earlier that it is an inherited disease and that diagnosis can be delayed even after the onset of symptoms. By performing such newborn mass screening, we can expect to identify LSDs at an early stage, thereby accelerating the timing of a therapeutic intervention. I will now introduce the treatment options from the next slide. Page 25, please. As discussed in the previous overview, drug therapy for Gaucher disease includes ERT, substrate synthesis, inhibition of therapy, hematopoietic stem cell transplantation and Chaperone therapy. ERT is used as a first-run therapy and its mechanism of action is to break down intracellular glucocerebroside by intravenous administration of the deficit glucocerebrosidase enzyme replacement therapy includes our product velaglucerase alfa. Another commonly user therapy is substrate reduction therapy which suppresses the synthesis of the substrates that accumulate in cells. Other therapies that are being investigated at the research and clinical trial level include gene therapy, nanoparticles and in utero enzyme replacement therapy. I will now introduce the clinical results of our product, VPRIV, from the next slide to show how ERT, which is the main treatment method can be expected to be effective. Next slide, please. This shows mechanism of action of enzyme replacement therapy. Velaglucerase alfa is human cell line derived product and mannose glycan is added which binds to mannose receptor on the surface of the macrophage shown in Y-shape symbol, and they are taken up by cells like endocytosis. And ultimately, this enzyme preparation is delivered to lysosomes for action, as an enzyme. That way, glucocerebrosides can be degraded. With this mechanism, lysosome in the macrophage is normalized. In the next slide, I will show you the clinical trial results. This is a clinical study for adult and pediatric patients. There was a global Phase III clinical study protocol. On the left, you'll find 3 core clinical studies. On the right, you'll find extension study for each trial. The study [ of both the arms ] for 5-year treatment of velaglucerase alfa and then that switched from imiglucerase to velaglucerase alfa switch. In the next slide, I will show you the results, Page 29, please. First, I will show the data of the untreated Gaucher disease patient and healthy population. The blue bar is healthy population data, green line shows untreated patients' data as the left chart shows spleen and liver volume greater than the healthy population. in the center, hemoglobin parameter is showing the extent of anemia, and compared to the healthy population, untreated patient has a lower level. And on the right, platelet counts has shown in the untreated group compared to the healthy population, the levels were lower; these are the symptoms of Gaucher disease and how the change from velaglucerase alfa is shown in the next slide. Slide 30. Velaglucerase alfa given for 4 years and the treatment goal achievement is shown on the right-hand side of each [indiscernible], you find target value and achievement is shown. For example, the top hemoglobin parameters, target for female was 11-gram per deciliter, for man 12-gram per deciliter. And if you achieve that or over, then the goal is achieved, similarly platelet counts, liver and spleen volume compared to the baseline at year 1 and year 4 after the treatment, the treatment goals are achieved. On the right bottom, BMD is shown. And this score is shown, which is a deviation of the average BMD of the Asia's population. This also shows for 4 years, BMD was achieved, and it was maintained. This is a 5-year result of velaglucerase alfa on BMD. On the left, untreated group treated. And on the right, the prior treatment was given and then treatment continued in the vertical, the BMD change and horizontally number of months of treatment. Red line shows Lumbar BMD, blue line shows Femoral BMD. On the left, you see that untreated velaglucerase alfa. And in that population, you can see BMD change improvement. On the right, the patient received prior treatment of imiglucerase, then switched to velaglucerase alfa and after the switch BMD was maintained. Next slide, please. This slide shows the 5-year follow-up results of the switch from imiglucerase to the velaglucerase alfa for 5 years. Hemoglobin concentration, platelet counts, spleen volume and liver volume. Those are observed and the switch from imiglucerase to velaglucerase alfa and each parameter are maintained for a long term. Next, I will show you the safety profile. Slide 33, please. Safety profile for this study is shown during the clinical trial in most serious adverse event was hypersensitivity observed in 2.1% of the patient by dosing discontinuation or symptomatic treatment, the reaction was resolved. The most frequently observed was infusion-related reaction at 39.4%. And most commonly frequently reported AE includes headache, dizziness, abdominal pain, bone pain and joint pain. Next slide, please. This is a slide summarizing Gaucher Disease. Page 34. In Gaucher Disease, glucocerebrosidase activity is reduced. And this is autochromosomal recessive inheritance. When there are mutation on both parents, then the onset is observed in the child. And the prevalence in Japan is 1 in 330,000, type 1, 2, 3 are evenly distributed. But as I mentioned, as you follow up the patient, some patients switched from type 1 to type 3 with neurologic symptoms. And the worldwide prevalence in Ashkenazi Jewish is 1 in 800, non-Jewish 1 in 40,000 to 60,000, and more often type 1 and type 3. ERT is a standard therapy of Gaucher disease and velaglucerase alfa can improve hepatosplenomegaly, anemia, thrombocytopenia and bone health. That is all from myself. Next, Fabry disease will be explained by Iwashiro.

I'm Sanghun Iwashiro, Medical Unit Head, Rare Disease Medical Franchise, Japan Medical Office, and I'm here to discuss Fabry's disease. I'm responsible for [ rare metabolic ] diseases within the company. My main tasks are to identify and resolve the medical problems based on communication with specialists and to design clinical studies as a way to solve them. As a clinician, I have experience in Surgery, and I'm currently treating patients as well. Next slide, please. This is Slide 36. I would like to go through the overview of Fabry's disease. Fabry's disease was described by Dr. Anderson and Dr. Fabry, respectively in 1898. Due to an abnormality in the enzyme of alpha-galactosidase A, the substrate global [indiscernible] Gb3 resulting in damage to various organs and early death in some patients. The disease involves mutation in the alpha-galactosidase A gene and X-chromosome and is inherited in the form of X chromosome recessive inheritance. Fabry disease is inherited from parent to child will be explained later. X-chromosome recessive inheritance usually affects only males, but women can also develop this disease. In the picture on the right, the male in the center wearing the blue shirt is [ Ramon, ] a patient diagnosed with Fabry disease, and he had been suffering from unexplained pain for many years. And on one occasion, analyst found signs that led to diagnosis of this disease. Many people in the family died early and [ Ramon's ] diagnosis reveals that Fabry disease was the cause. Genetic diseases can lead to a diagnosis, not only for the patient themselves, but also their family. Next slide, please, Page 37. This slide summarizes the incidence and prevalence. In Japan, it is reported to be about 1 in 7,600 to 12,000. As you can see, the figures vary from region to region. This is partly due to differences in study design and populations between reports. It is also assumed that the actual frequency may be a little higher as some cases of Fabry disease are asymptomatic or do not present with typical symptoms. Slide 38, please. The genetic form of Fabry disease is explained on this slide. How the mutated gene is passed on from parent to child, it depends on which of the parents carries a mutated gene. On the left is the case where the father carries the mutated gene. Girls inherit the X-chromosome from their father and therefore, always carry the mutation -- mutant gene. If a boy is born, the X-chromosome is not inherited from the father and therefore, cannot be passed on to the boy. On the right is a case where the mother carries a mutated gene on one of the X-chromosomes. In this case, there is a 50% chance that the mutated gene will be passed on, whether the child is a boy or a girl. Fabry disease is X-linked genetic disease that can be inherited from either of the parents. Next slide, please. This slide shows how Fabry disease presents itself. As you can see, various parts of the body and organs are affected. The symptoms of the skin, digestive organs, bones, joints, some nerves and the eye, which are highlighted in pink are set to occur relatively early. Late onset symptoms that may affect the patient's prognosis include heart failure due to left ventricular hypertrophy in the heart and also renal dysfunction in the kidneys. It is important to detect these symptoms at an early stage and to intervene early to prevent them from progressing, especially those that have an impact on prognosis. Slide 40, please. This slide shows the age at which symptoms of Fabry disease occur in men and women. The data is from the Fabry outcome survey, a multicenter international observation study that we have sponsored since our days at Shire. The vertical axis shows the site of symptom onset and the horizontal axis shows the mean age. The red bar shows the standard deviation and the mean age of onset is shown by gray vertical line. The data show a wide range of affected sites in male patients as well as the appearance of organ damage, including kidney, brain and heart damage as they get older. In female patients, symptoms are more common between the ages of 20s and 40s. And the range of affected sites is as wide as that of men. While there are differences in the timing of symptom onset, the disease is characterized by similarly broad spectrum of disorders in both men and women. Slide 41, please. This illustration shows the clinical cause of classical Fabry disease. Accumulation of the substrate Gb3 begins in childhood. Initial symptoms include pain, GI symptoms and the hypohidrosis, resulting in impairment of QOL. As time passes, the disease progresses to tissue and organ damage. And people in the 30s and 40s, it progresses to irreversible organ damage, such as kidney and heart damage. The previous slide showed the chronology of symptom onset. And as you can see in this type of a progressive disease, it is important to intervene early to limit the progression to a wide range of organ damages. I will now discuss the aspects of QOL in patients with Fabry disease. Please turn to Page 42. This is a report examining the extent to which QOLs impaired in patients with this disease. SF-36 is a survey instrument that uses 36 questions to measure health status in QOL. The data presented to you are approved analysis of the SF-36 subdomain scores and the comparison of the scores with a reference population of people without Fabry disease. As you can see, the scores of patients with this disease are lower in various indices, including physical function and in daily life and body pain, leading to a decrease in QOL. Often, patients with this disease suffer psychologically as well with depression being one of the most common complications. As the patient's appearance does not differ much from that of a normal person, it is difficult for people around them to understand the pain and the limitations of physical functions, which can also be factor leading to depression. Next slide, please. And the current methods of the Fabry disease diagnosis is shown here. In the upper part of the slide shows that diagnosis method is different between men and women. When Fabry disease is suspected based on symptoms and the family history, alpha-galactosidase A enzyme activities examined in males, leading to a definitive diagnosis. In female patients, alpha-galactosidase A enzyme activities often within the normal range. So genetic test to analyze the GLA gene is used to confirm the diagnosis. Next slide, please. I mentioned earlier the significance of early treatment intervention. And I'd like to discuss how long it takes from the onset to diagnosis. The graph on the left shows the number of years from symptom onset to diagnosis for adults and children divided into 2 time period, 2001 to 2006 and 2007 to 2013. In adults, it took a median of 14 years to reach diagnosis between 2001 and 2006, but this was reduced to 10.5 years between 2007 and 2013. In children, it took 5 years for the former period and 4 years for the latter. Although the number of years it takes to reach a diagnosis has been shortening perhaps due to increased disease awareness, it still takes more than 10 years for adults. Misdiagnosis that patient have suffered before diagnosis include rheumatology-related diseases and neuropsychiatric disorders. There are still challenges in making an accurate diagnosis at an early stage. Now let me move on to the treatment. Slide 45, please. Currently, there are 2 types of treatment for Fabry disease, ERT, enzyme-replacement therapy and Chaperone therapy. ERT, as described by Suzuki [indiscernible] is a treatment that slows the progression of the disease by replacing missing enzymes. Patients with confirmed diagnosis of the Fabry disease are indicated for long-term use and home administration is an option if it is well tolerated. In Chaperone therapy, a Chaperone compound binds to alpha-galactosidase A and enzyme, it is stabilized by genetic mutation, to stabilize its structure and promote its normal transport within the cell. This treatment improves enzyme activity. In addition to these 2 standard therapies, research is also being conducted to investigate the therapeutic application of substrate reduction therapy, SRT and gene therapy. We have an ERT, agalsidase alfa or Replagal, the product name. I will present clinical results from the next slide. Page 46, please. Here are the data from the Phase II/III clinical trial at the time of approval of Replagal, which investigated the effect on pain and on renal dysfunction associated with Fabry disease. 26 adult male Fabry disease patients with neuropathic pain were randomized to receive agalsidase alfa 0.2 milligram per kilogram every other week or placebo for 6 months. As shown in the upper right graph, patients in the agalsidase alfa group showed a continuous decrease in the score of worst pain in the last week on the Brief Pain Inventory, BPI questionnaire and showed a significant improvement over the placebo group. In an open-label extension study, the effect on renal dysfunction was also examined. The lower right graph shows the estimated glomerular filtration rate by stage of chronic kidney disease at baseline. Agalsidase alfa contributed to the stabilization of estimated GFR, especially in patients with mild-to-moderate renal dysfunction in stages 1 and 2. This suggests that therapeutic intervention before the progression of renal dysfunction may help maintain renal function. The treatment was well tolerated in both studies. Next slide, please. Slide 47. Here, we are studying the effect of the substrate [indiscernible] Gb3 or myocardial accumulation and left ventricular myocardial [ rate. ] 15 adult Fabry disease patients with left ventricular hypertrophy, were randomly assigned to receive agalsidase alfa 0.2 milligram per kilogram every other week or placebo for 6 months. As a result, the graph on the right shows the absolute change in myocardial Gb3, which was reduced by 20% in the agalsidase alfa group. In the secondary efficacy endpoint, agalsidase alfa significantly reduced left ventricle myocardial mass versus placebo. Open-label extension study has also confirmed consistent results with agalsidase alfa significantly reducing LVM compared to baseline after 24 to 36 months of treatment. These trials also showed generally good tolerability with no reports of serious adverse events associated with agalsidase alfa. Next, please turn to Page 48. As I mentioned earlier, renal function and left ventricular hypertrophy are important factors in the prognosis of patients with Fabry disease. Here are the long-term data of agalsidase alfa with a 20-year follow-up of the Fabry outcome survey. The left shows the annual rate of change in eGFR. Although no comparison with the untreated group is available to make a precise assessment. It is interpreted that agalsidase alfa treatment has slowed the decline in renal function. On the right is the annual rate of change in LVMI, Left Ventricular Myocardial Index [indiscernible] of left ventricular hypertrophy, although there is no comparison with the untreated group. It is interpreted that agalsidase alfa treatment moderates the increase in LVMI. As I mentioned earlier, administration of agalsidase alfa contributes not only to pain, but also to stabilization of renal function and prevention/progression of a left ventricular hypertrophy. Now I'd like to introduce safety. Slide 49, please. Agalsidase alfa safety profile. The most frequently reported AE, adverse event in clinical trials was the infusion-related reactions at 13.7%. [indiscernible] most frequently during the first 2 to 4 months of treatment and decrease in frequency as the duration of treatment increased. Symptoms included chills, headache, fever and nausea, which are common to those shown in the second point on the slide. Most adverse events were mild-to-moderate in severity. A low-titre IgG antibody response to agalsidase alfa was observed in approximately 24% of male patients. This reaction occurred between [indiscernible] months post treatment. And after 54 months, follow-up, 7% of patients had resolved IgG antibodies indicating that immune tolerance had been established. Now please turn to Slide 50. Take-Home messages of Fabry disease. Fabry disease is an X-linked genetic disease that can be inherited from either parent with a mutation in the GLA gene on the X-chromosome. The transmission of the disease to the child depends on which of the parents carries the mutated gene. Fabry disease is characterized by a variety of symptoms in multiple organs, including heart and the kidney, that can affect the patient's prognosis. The onset timing of symptoms may differ between men and women. Adults often remain undiagnosed for nearly 10 years after the onset of symptoms. Since organ damage made progress during this time, you'd understand why it is so important to make a [ hurry ] and accurate diagnosis. Finally, about treatment. The standard treatment for Fabry disease is Enzyme Replacement Therapy and Chaperone therapy. Agalsidase alfa and ERT improves the pain, stabilizes renal function and contributes to the prevention of LV mass increase, an indicator of left ventricular hypertrophy. That's all about Fabry disease. Please go to the next slide. Next, I will explain Hunter Syndrome. I will continue to explain. Page 52, please. Hunter Syndrome is also called as Mucopolysarcharidosis II. But in today's presentation, I will continue to use Hunter Syndrome. Hunter Syndrome was reported in 1917 by Dr. Charles Hunter when he saw the brothers with this disease. It's a kind of lysosomal storage disease. Iduronate-2-sulfatase is the enzyme that is mutated, and substrates of Glycosaminoglycans is accumulated in the cell and start to develop. Hunter Syndrome, like Fabry Disease, is X-linked recessive hereditary disease, 0.38 to 2.16 in every 100,000 live births is the report of [indiscernible]. Next slide, please. I will explain hereditary part of Hunter syndrome. Like Fabry Disease, it is X-linked recessive inheritance disease, so how the mutation is passed on to the child depends on which parent have host the mutated gene. On the left, when the mother has a mutation on one of the X chromosomes. In this case, the chart either a boy or a girl, will inherit this mutation with 50% of probability. On the right-hand side, when the father has a mutation, then a girl receives X chromosome from the father, therefore, mutation is always passed on to the girl. In case of a boy, X chromosome is not passed on from the father, therefore, no inheritance to the boy. Slide 54, next slide, please. Next is symptoms of Hunter syndrome. Physical features that is typical is snoring or respiratory signs. And hepatomegaly or splenomegaly in GI area and prominent forehead and [ thick ] dark eyebrows, and some [ characteristic ] features in the face. But that includes cardiac vascular disease, bone deformity, low stature, and musculoskeletal symptoms. In [ 2 sets ] of Hunter Syndromes, there are CNS symptoms of mental and retardation and cognitive functions. Thus, there is a broad range of symptoms. And the patients with Hunter Disease have to bear various burdens, leading to lower QoL. Especially patients with CNS signs, then the average life span is set to be 10 to 15 years on average, and it is not uncommon that there are some serious outcomes. Next, Slide 55, please. Clinical features of Hunter Syndrome is divided into 2 types, non-neuronopathic and neuronopathic. As summarized in the slide, 1/3 is non-neuronopathic and neuronopathic is set to be about 2/3. Also, the age at diagnosis with neuronopathic type is 1.7 to 2.7 years old, and non-neuronopathic is 3.7 to 6.8 years old. The symptom onset is earlier in neuronopathic. Regarding signs and symptoms, in non-neuronopathic, the somatic symptoms are the main symptoms. In contrast, in neuronopathic Hunter Disease, then in addition to somatic symptoms, CNS symptoms also emerge. As for life expectancy, in non-neuronopathic patients, they quite often reach adulthood. But with complications of cardiac or respiratory diseases, they may pass away in their 20s and 30s. Neuronopathic patients, after the onset rapid progression of somatic and neurological symptoms are observed and by neurodegeneration of cardio risk [indiscernible] complications, they tend to decease in the teenage years. Next page, please. I explained clinical symptoms of Hunter Syndrome. This slide explains non-neuronopathic disease progression. From left to right is the flow as the age advances few months after the first. Normally, respiratory signs are presented. Then in the childhood, delay in bone formation shows the symptoms of musculoskeletal and developmental delay and CV events also may emerge. And as the patient ages, there could be secondary cognitive impact. As I mentioned before, non-neuronopathic patient quite often reach to the childhood -- the adulthood, where the most common cause for death is respiratory, about 65%, and cardiac disease is 16%. So complications of respiratory and CV diseases are important risks. Next slide, please, Page 57, please. This shows the disease burden of neuronopathic patient with poor prognosis. On the left, you'll find cognitive function disorder and developmental delays, and other neurologic symptoms that can undermine day-to-day life and QoL of the patient. It can also be burden not only for patients, for caregivers also. On the right, you find behavior problems. From about 2 years after birth, hyperactivity, aggressiveness, biting, impulsiveness, sleep disorder and social dysfunction are some of the symptoms which can give very serious impact on family life. And patients with neuronopathic Hunter Disease patient, in addition to somatic symptoms, CN symptoms come around. Therefore, disease burden is higher. Page 58, please. As I had explained in the previous slide, in the Hunter Syndrome, there are various symptoms throughout the body. So monitoring of the whole body is recommended, and that means various health care professionals need to provide support. It is hard to predict which body part will be affected and when it gets serious. So looked as a various specialty area, but also many health care professionals in multi-discipline manner need to provide support. To support patients with Hunter Syndrome, many health care professionals should be aware of the disease symptoms, and they should be aware of methods and guidelines for evaluation and monitoring. Those should be available. Next are the explained diagnosis of Hunter Syndrome. Page 59, please. This is an overview of the tests that are usually performed with a suspected case of Hunter syndrome. If there are initial clinical signs, tests are carried out in the order of urinalysis, blood tests and genetic testing. We will not go into technical details, but give you an idea of the testing process. If the urine test shows the presence of substrate, glycosaminoglycan, and Hunter Syndrome is suspected, a blood test is performed. If the blood test shows a low enzyme activity of iduronate-2-sulfatase and multiple sulfatase deficiency can be excluded, we proceed to genetic testing. And if possible, the presence of mutation in the iduronate-2-sulfatase gene is confirmed, and the definitive diagnosis is given. If no mutation is identified or genetic analysis is not possible, a second enzyme activity assay is performed to confirm the diagnosis, looking at white blood cells. Again, it is important to understand that when Hunter syndrome is suspected clinically, a definitive diagnosis is reached through a process of urinalysis, blood tests and gene testing. Slide 60, please. In the previous slide, we talked about the diagnostic process for Hunter Syndrome. And as with Gaucher Disease and Fabry Disease, early diagnosis and early therapeutic intervention are important factors in improving prognosis. Patients with Hunter syndrome have no obvious symptoms at birth, and many of the early manifestations are very similar to common childhood diseases. This makes early diagnosis very difficult. As it is a genetic disorder, a family history may allow suspicion of Hunter Syndrome at the onset of symptoms. However, without family history, diagnosis may be delayed. Many patients experience a delay in diagnosis for approximately 2 to 4.5 years. There are available treatments such as Takeda's ELAPRASE, and the new treatments are also expected in this area. And therefore, early diagnosis and separate intervention is important. Newborn screening programs may also contribute to early diagnosis. And I would like to talk about the treatment starting with the next slide, Slide 61. This slide summarizes the treatment of Hunter Syndrome. ERT, Enzyme Replacement Therapy, has long been the standard of care for physical symptoms in the treatment of non-neuronopathic Hunter Syndrome. Takeda's idursulfase, product name, ELAPRASE, is an enzyme replacement therapy. ERT may improve physical symptoms, reduce urinary glycosaminoglycan levels and decreased liver and spleen volume. Hematopoietic stem cell transplantation may also be used as a treatment for non-neuronopathic Hunter Syndrome. This treatment involves the transplantation of donor-derived blood stem cells that provide a source of normally-functioning enzymes. But the number of actual cases is limited, and there could also be a risk of complications and even death. ERT and HSCT are used to treat non-neuronopathic Hunter Syndrome, but supportive care is needed to care for the overall symptoms, including neurological symptoms. In Japan, pabinafusp alfa, which is also expected to have an effect on neurological symptoms, and JCR Pharma's IZCARGO were launched last year, and are expected to contribute to patients with neuropathic Hunter Syndrome. Starting with the next slide, I would like to talk about the clinical results of ELAPRASE. This is a clinical trial of ELAPRASE Phase II/III, and I will use the generic name, idursulfase. In this study, patients were stratified according to the baseline profile and were randomized into 3 groups. A weekly intravenous infusion of idursulfase 0.5 milligram, a [ bi-weekly ] infusion of the same dose alternating with placebo and placebo. And they were looked at for 53 weeks, primary efficacy endpoint was to compare the change in the composite score of respiratory and motor function from baseline, and this is a comparison between once-weekly idursulfase group and the placebo group. Next is Page 63. This is a primary efficacy endpoint result on composite scores. The first one is physical performance shown on the left-hand side, which is a 6-minute walk test. Six-minute walk test is a walking test in which participants walk as fast and as far as possible within 6 minutes. The weekly idursulfase group showed a significant improvement in the 6-minute walk test score compared to the placebo group. The right-hand graph assesses respiratory function by looking at the change in the amount of forceful, rapid exhalation volume. The once-weekly idursulfase group improved significantly on this measure compared with the placebo group. Next slide, please. This slide shows the safety of idursulfase in the study. 59.6% of patients had one or more adverse events where causal relationship to the treatment could not be denied. Serious adverse events occurred in 28.7% of patients, including 6 cases of carpal tunnel syndrome, 2 cases of bacteremia, chronic otitis media, sleep apnea, abdominal strangulated hernia and obstructive airway disorder. Over 2 cases of obstructive airway, one patient had a life-threatening adverse event. 53.2% of patients had at least one dose-related reaction. The most frequent symptoms were headache in 16%, urticaria in 11.7%, and fever in 8.5%. The graph at the bottom of the slide shows the proportion of patients who experienced dose-related reactions over time. The proportion of patients who develop those related reactions decreased with continued treatment. Please turn to Slide 65. The impact of idursulfase on life expectancy is as shown on this slide. This data comes from the Hunter outcome survey, a multi-center international observational study that we have sponsored since the time of [ Shire ]. The study included 895 male patients enrolled in the observational study until 2016, who were divided into 2 groups, those who had at least once being treated with intravenous idursulfase and those who have not. Patients treated with idursulfase had a median survival of 33 years based on Kaplan-Meier estimates compared with untreated group with a median survival of 21.2 years. In other words, there was a difference of 11.8 years. This is an increase in survival. The graph at the bottom of the slide shows Cox regression modeling of survival from birth. The risk of death in the group of patients treated with the intravenous idursulfase was reported to be 54% lower than the untreated group. Treatment with idursulfase mainly improves the physical symptoms, but may also contribute to improved life expectancy, as you can see from this information. Next slide, please. This is a summary of Hunter Syndrome. Hunter Syndrome is caused by an abnormality in the iduronate-2-sulfatase enzyme, which results in the accumulation of the substrate glycosaminoglycan and mucopolysaccharide in the cells. It is an X-linked genetic disease, and it is inherited differently depending on which of the parents carries the mutated gene. We also mentioned that it mainly occurs in men. Clinically, the disease is characterized by the development of multi-organ disorders and symptoms. In particular, neuronopathic Hunter syndrome presents with a central nervous system symptoms and has a poor prognosis, with many patients dying in their teens. We have already mentioned that early diagnosis of Hunter syndrome is difficult because the early signs and symptoms are very similar to those of other common pediatric conditions. It is important to further raise awareness of the condition among health care professionals in order to raise awareness of the condition, so that signs and symptoms can be recognized at an early stage. Finally, we discussed the treatment options. Enzyme Replacement Therapy is the standard of care for non-neuronopathic Hunter Syndrome, and our ELAPRASE has been shown to improve physical symptoms and life expectancy. I will now summarize today's discussion on the next slide, Slide 67. This is a summary of the information on lysosomal storage diseases presented by myself and Suzuki. Although the enzymes involved vary from disease to disease, it is a genetic disorder caused by the accumulation of substrates that should be degraded due to deficiency of reduced activity of lysosome enzymes, causing dysfunction and symptoms in various parts of the body. The incidence varies from disease to disease, but the cumulative incidence of all lysosomal storage diseases is reported to be 1 in 7,000 live birth. Gaucher Disease, Fabry Disease and Hunter Syndrome, which we have introduced to you today, also reported to have an incidence of 1 in thousands to hundreds of thousands, making them extremely rare diseases. Clinical manifestations include hepatosplenomegaly, pulmonary and cardiac abnormalities and musculoskeletal abnormalities, including developmental defects. And the importance of early diagnosis and therapeutic innovation was also discussed, as approximately 2/3 of patients with lysosomal storage disease present with neurological symptoms, some of which can be a significant prognostic impact. It is also important to understand that ERT is a common treatment for the 3 diseases introduced today, and that it contributes to the improvement of patient symptoms and life expectancy. This concludes today's presentation. Thank you very much for listening to us.

Thank you very much. I would like to move on to the Q&A session. We have 2 presenters and also, as a panelist in this Q&A session, we have [ Sachiko Hashimoto ], Japan Medical Office; and [ Kazaki Inya ] and [ Emiko Komura ] from Japan Development Center. [Operator Instructions] The first question is Morgan Stanley, Muraoka-san.

Muraoka, Morgan Stanley. Regarding the Hunter Syndrome, will I -- actually relearned that neuronopathic manifestations are so severe. And I'd like to talk about the biosimilars and Hunter Syndrome. In Hunter Syndrome, you know that to improve neuropathic manifestation, I believe that it is truly important. And in Japan, now we have IZCARGO, that is your partner's product. And I think that penetration so quick. Maybe in 6 months or so, that would be 50-50 in market share. And given the severity of neuropathic manifestation of the Hunter Syndrome, it might be difficult for you to comment, but is it as you expected? Or the penetration with IZCARGO is much higher than your original expectation? If there is any gap from your original expectation, what's the difference?

[ Enya ] would like to ask -- answer to your question.

Muraoka-san, thank you for your question. First, regarding IZCARGO in Japan, JCR has been marketing. So for the details, I cannot comment on that. However, as we presented, in Hunter Syndrome, there is a need, a very high need of neuropathic symptoms. And so far, various companies made efforts in research and development to cross the broad brain barriers. And from the market, from the patients and also from the physicians, there are high levels of needs expressed. Therefore, I think that the current penetration rate is as I expected personally. However, for the details, please ask to JCR, because it is not our own product.

And you have the right ex-America, ex-U.S. If you can successfully launch TAK 141 in the countries you have rights for, do you think the market penetration will be [ enhanced ] or even faster than what we currently see in Japan?

Thank you for your question. I'd like to also answer to that question. As you know, currently, [ Global ] Phase III started, and we have to wait and see the results of Phase III study. Without seeing the result, we cannot make a specific comment. However, concerning the needs of neuropathic symptoms, that is quite high not just in Japan, but also overseas. Therefore, from physicians and the patients, I think it is highly expected.

Understood. Another question about biosimilar, I'd like to ask you a question. [indiscernible] ELAPRASE and Replagal, I think mostly their substance patents are almost expiring or already expired. But worldwide, I don't see or hear much information about new biosimilars. So how should I understand the status? My rough understanding is that protein production yield is quite low, very inefficient. That's what I heard in the past, and that's why it is difficult to produce. Is it the right understanding? Or are there any other reasons like relationship with the patients is quite important, therefore, it is quite a challenge for any biosimilar to come in? Could you explain?

Komura from Development. Thank you for your question, Muraoka-san. How hard it is for biosimilars to come in the market? It is our imagination. But as Muraoka-san said, one point is that it requires a special manufacturing, and genetic recombination technology is needed. Therefore, some special knowledge and capabilities are needed. And because it is a rare disease, market size is not so big. And together with difficult manufacturing, I think it is probably difficult to make the business available. And as you said, patients and the health care professionals in these areas, we need a strong tie and linkage. Therefore, if it is a new company it will come into this space, it might be difficult for them to step in. Currently, there are 3 products available in the market and with those, we'd like to continue to contribute to the patients.

I believe annual sales of your products are about JPY 50 billion to JPY 70 billion, and competitor products exceed JPY 100 billion. Can we understand that it is difficult for biosimilars to enter the market due to the reasons you just explained, even after patent expiry and even with the market size?

Yes, that's what we consider.

Next question, please. Next question from Daiwa Securities, Mr. Hashiguchi.

Hashiguchi from Daiwa Securities. My first question is about the difference in treatment between Japan and overseas. You may have mentioned in your presentation today, but I understood that you mainly talked about treatment concepts in Japan. If there are differences in treatment concepts or data between Japan and Western countries, can you please introduce them? In my understanding, for example, for HSCT in Japan, performance is good, but not so good overseas, and that may impact selection of therapies. I heard this is a basic question, but can you give your answer to this?

Hashiguchi-san, thank you. This is Suzuki speaking. Let me explain that. Hashiguchi-san, as you mentioned, the approach of therapy in Japan versus overseas like Gaucher Disease, I explained that. So let me take that example. Disease types in Japan versus Europe and U.S. is a bit different. In overseas, the majority is Type 1, which mainly shows organ damage. Whereas in Japan, neuronopathic patients weigh almost 2/3. So in overseas, those treatments, such as enzyme replacement therapy that target organs, can address organ damages. In Japan's case, on the other hand, enzyme replacement therapy can address organ damages, but neurological complications remain unresolved. So when you look at overseas situation, ERT is the main therapy and many patients benefit from that, so that's the main therapy. But in terms of research, Chaperone therapy or SLT therapies and other therapies are becoming available. Some oral possibilities are explored, and gene therapies are also considered. So maybe that kind of fundamental therapy at the research level is throwing attention. So comparing Japan versus U.S., U.S., you have much budget for research or development, and that is moving ahead, in my impression. So therapies, well, main is ERT. But in Japan, there are other needs going up in demand. And HSCT, that is for Gaucher Disease. If I may take that example. So therapy by HSCT, as I explained before, where bone marrow is attacked and you try to introduce fresh bone marrow, and then immunosuppresion continues to be used for the rest of the life almost, so that is the type of therapy. So in the meanwhile, respiratory, heart disease and other rejection issues may arise. HSCT may be effective, we are aware of that. But some doctors hesitate to use that approach. And when you look at Gaucher Disease, ERT, when that becomes available and much of the therapy can be achieved to a certain extent. So there is not so much need for HSCT among some patients. So as of now, in Japan and U.S. together -- overseas together, about 50 cases of HSCT. In the past 10 years, there has been no new HSCT therapies. In other lysosomal storage disease is different, but HSCT is one of the options. We are aware of that, but it's not actively introduced as of now. I hope this answered your question.

[ Hashimoto ] from Japan Medical Office, if I may add some comments. The approach to therapy in Japan versus overseas, rather than there's a big difference with all genetic diseases. Therefore, depending on disease type, options for therapy will differ, and also access to medicine differs country by country. That is another significant factor, I think. In Japan, as lysosomal storage diseases are designated as intractable diseases and medicine access is easier for the patients, but that's not true in other countries. Therefore, treatment option may be impacted by that. And as Suzuki explained, HSCT regarding efficacy is -- [ LSD ] is significant, but the burden associated with the therapy is strong. If there are no other options of therapy, then this could have been a very strong one. But now we have ERT, and other therapies are available to cover other same needs. Therefore, it's not considered very actively as for HSCT. I think that's the realistic situation.