Terumo Corporation ($4543)

[Audio Gap] manufacturing, we combine materials processing and coating technologies to ensure product performance is consistently reproduced as designed, enabling high producibility and globally consistent supply. In this way, our core technologies are the source of competitiveness for each business and also enable new value creation by combining technologies to meet clinical needs. Importantly, these technologies have not only supported our growth to date, but will also serve as drivers of future growth. Today, each company of business represent key products and initiatives built on these technologies. We hope this session will deepen your understanding of Terumo's growth.

Thank you very much. Next, Mr. Hirose, President of Cardiac & Vascular Company will give his presentation. Mr. Hirose, the floor is yours.

Good afternoon, everyone. My name is Hirose from the Cardiac and Vascular Company. Today, I would like to focus on the TIS business where we are planning to launch multiple new products this fiscal year and explain the clinical and business value that each of these products will deliver. First, let me fully look back at the overall performance of C&V Company. Supported by solid underlying demand, we have maintained strong business momentum and achieved high single-digit revenue growth, in line with the targets set under GS26. At the same time, we have significantly improved AOP margin. In addition to the growth of a high-margin business, we have implemented operational improvements across our manufacturing sites and executed strategic pricing initiatives. Through these efforts, we have steadily enhanced our earnings capability even in a volatile environment. TIS represents approximately 70% of C&V Company revenue and service as a core business. At the same time, it remains a key focus area with significant growth opportunities ahead, driven by continued portfolio expansion. Today, I will walk you through a new product lineup that would underpin this future growth. TIS business is built on a unique business model that leverages our strong foundation in access products to expand into advanced therapeutic devices. In fiscal year '26, we plan to launch 3 new products across both the access and therapeutic domains. In the therapeutic area, the first product is DSS. This is an innovative device that will serve as our entry point into the North American imaging market, integrating 2 sensors, IVUS and OFDI into single catheter. The second product is Kanshas. To further accelerate the radio and peripheral interventions or R2P, we have developed a long shaft drug-coated balloon or DCB. Finally, in the access domain that supports these therapeutic solutions, we have launched a new hemostatic device TR. This product is designed to address the rapidly growing distal radio approach and will further strengthen the -- our #1 position in the access market. In the following slides, I will provide more details on these products. First, let me walk you through the market environment for Imaging. The global imaging market continues to expand not only in the U.S., but also in emerging markets such as China and India, and is expected to reach $1.3 billion in 2031. This growth is underpinned by increasing clinical evidence, demonstrating that the use of imaging improves outcomes in interventional procedures. In fact, in the U.S. last year, imaging-guided PCI received the highest level of recommendation, Class 1 with Level A evidence in major clinical guidelines. In addition, the rapid adoption of devices such as atherectomy and IVL has further reinforced the importance of imaging, particularly for the accurate assessment of calcified lesions. The penetration of imaging and PCI procedures in North America is projected to increase to 56% by 2031 with rapidly expanding imaging market, we are launching a dual-sensor system DSS at exactly the same right time. DSS is an innovative system that intimates 2 sensors, IVUS and OFDI into a single catheter enabling the simultaneous acquisition and the visualization of 2 types of imaging. This capability supports optimal treatment planning and decision-making across a wide range of cases, thereby contributing to further improvements in procedural outcomes. The ability to assess lesions using both imaging modalities in parallel provides a higher level of diagnostic confidence, which represents a key value proposition of the DSS. Large DSS, we expect our imaging business to grow more than 3 fold by 2031. In terms of geographic rollout, we plan to launch in North America in the first half of this year, followed by Japan in the second half. We also intend to enter the Indian market. And by expanding into these high-growth emerging markets, we aim to further strengthen our global position. DSS catheter DualView is a highly differentiated product realized through the integration of a deep expertise in imaging catheters and advanced manufacturing capabilities. While maintaining the same size as imaging catheters widely used in the market today, DualView successfully incorporated 2 sensors, IVUS and OFDI and is designed to be scalable for mass production. As a result, DSS can be seamlessly adopted in existing imaging workflows without requiring changes to procedure processes or device configurations. This high level of compatibility and ease of use ensures excellent clinical practicality, which we believe will strongly support the smooth adoption and rapid penetration of DSS in clinical settings. Looking ahead, we will further enhance our software capabilities by integrating AI technologies. Specifically, AI will enable faster and more accurate analysis in the areas that have traditionally relied on visual assessment by clinicians. This includes recommendations for optimal stent size and placement, quantitative evaluation of classified plaque and post-stent deployment assessment. By incorporating these capabilities, we aim to improve both the quality and efficiency of clinical decision-making, thereby providing stronger support for the realization of optimal treatment strategies. Next, I move on to Kanshas. First, let me explain the status of the radial approach, which we have set as a KPI and GS26 supported by benefits such as improved patient quality of life and better health care economics, the adoption of the radio approach has steadily expanded across most disease areas and progress has exceeded the targets set under GS26. On the other hand, in the peripheral domain, the radial approach ratio remains below our GS26 target level. This is due to device-related limitations as well as the emergence of new treatment trends driven by the growing adoption of atherectomy devices in recent years. Turning to the peripheral market in Japan. Our efforts to promote the radial approach supported by a comprehensive RTP portfolio, including the Misago stent have contributed to increasing radio penetration to 20% in the iliac segment. In contrast, in the SFA segment, where the number of cases is larger, the radial approach adoption rate remains low at around 2%. In this segment, treatment with DCBs has become the standard of care, supported by accumulated clinical evidence. In fact, the CFPs are used in a stand-alone therapy in approximately 70% of SFA cases. Going forward, by expanding the adoption of transradial approach in this SFA segment, we aim to increase the radial penetration rate around 20%. To address this unmet need, we have developed Kanshas as a DCB specifically designed for transradial SFA treatment and launch it in Japan. Kanshas features a long shot with an effective length of 200 centimeters enabling reliable device delivery to the lesion site via the radial approach thereby making SFA access feasible. In addition, our proprietary coating technology in minimize its drug loss during delivery, while ensuring efficient drug transfer to the vessel wall upon reaching the target lesion, representing a highly differentiated product design. With these features Kanshas is currently the only DCB with reimbursement approved for radial use and we expect it to play a key role in driving further adoption of the radial approach in the referral interventions. At the core of this innovation is our proprietary coating technology, no one has Unicoat. A key feature of Unicoat is the ability to achieve a high-level balance between 2 inherently conflicting requirements, minimizing drug loss in balloon delivery while ensuring efficient drug transfer to the vessel wall upon reaching the target lesion. This enables maximization of the therapeutic efficacy while also contributing to a reduction in the risk of distal embolization in the peripheral arteries. These characteristics represent a critical source of Kanshas competitive edge. This advanced capability has been made possible by the expertise we have accumulated over time, not only in capital design, but also in drug handling, supported by the extensive trial and error in the developing of coating technologies. Finally, I will explain to your digital which we have launched as part of our efforts to further strengthen our Access business foundation. Our Access business is built on a comprehensive portfolio that uniquely enables both the reduction of complications and the improvement of in-hospital procedural efficiency. This has allowed us to establish a stronger global leadership position. I've represented as an example is our hemostasis device TR band, which has achieved a dominant global share of over 60% and built a strong brand presence. Looking back at the history of intervention treatment access initially began with the femoral approach. This was later followed by the widespread adoption of the radial approach as a less-invasive puncture site, which has now become the global standard. Today, this evolution is entering its next phase with the rapid adoption of the distal radial approach DRA as most advanced access site. Within the broader trend towards minimally invasive procedures, DRA represents the leading edge of this evolution. While the conventional radial approach involves puncturing on the side of the wrist, the DRA accesses a more distal side on the dorso side of the hand. This approach has been gaining attention due to several benefits that contribute to reducing patient burden, including greater flexibility in patient arms positioning during procedures short our hemostasis time and ability for patients to use their hands right after the procedure. In addition, DRA is associated with a relatively lower risk of radial artery occlusion. As a result, the number of DRA procedure is expected to continue growing at an annual rate of 10%. We aim to leverage the strong brand equity of TR brand and extend our leadership into the DRA segment with the global of establishing a #1 position in this growing market. Finally, I will explain TR band distal, which we have launched as part of our efforts to see hemostasis standard in DRA, These dedicated devices specifically designed for the disarray approach while inheriting the highly reliable hemostasis mechanism of the conventional TR band. It delivers enhanced visibility, improved wear in corporates of pressure adjustment, achieving a high level of performance. With this new product, we further expand our hemostasis device portfolio and strengthen our ability to provide a comprehensive solution covering the entire procedure from access to hemostasis. Through these efforts, we will continue to lead the advancement of safer and less invasive catheter-based treatments. As I have line today, the TIS will continue to drive stable and sustainable growth beyond GS26 through the creation of a new market in Imaging DSS, the further acceleration of the radial approach with Kanshas and the strengthening of our leadership position in the access domain with Tr brand distal. We are well positioned to drive the growth, not only for the CV company, but for the Terumo Group as a whole. This concludes my presentation. And today, we are also joined by Dr. Akasaka, a leading authority in imaging in one of our medical advisers. I'd like to invite Dr. Akasaka to share his view on the strength of Terumo's imaging technologies and clinical value of DSS. Dr. Akasaka, the floor is yours.

My name is Akasaka, you're medical adviser and please allow me to remain seated while I talk. As Hirose-san mentioned, dura sensor image was approved this year and will be launched in Japan. As was explained, in any domain for therapies, guidelines must be adhered to that is recommended. And according to health care guidelines, whether it is in the cardiovascular region, in 2024 in 2025, in United States and Japan, a little earlier, intravascular imaging must be used in order to improve the outcome that was recommended by the guidelines. And the active use was recommended Class A or evidence level, the highest evidence level was recommended. And this use was recommended at the highest level. And that involves 2 approaches. IVUS is one and also near infrared OFDI, Those are the 2 types of sensors being recommended to use. However, there was a limited restriction -- usage restriction. So either one was -- has been used. However, according to clinicians, about 40% or 50% of doctors said that they prefer to use 2 imaging sensors in order to -- for the betterment of the outcome or treatment. However, because of the reimbursement limitation that we have been unable to use both. But thanks to Terumo technologies, these 2 sensors are now being available in one go. For -- and that improves the level of treatment that we can provide. The intra IVUS has a well penetration. Therefore, it guarantees a wider areas. But the OFDI 50-micrometer high resolution is conferred. By combining these 2, the precision medicine or precise procedure can be provided and that is a great advantage. And globally, this is a Class 1 recommendation and will be launched in Western markets. Therefore, usage will improve significantly. That is my hope. And that concludes my comment. Thank you.

Now we will begin the Q&A session. Today's event is being rolled in a hybrid format. [Operator Instructions] So from moderator 3 rows down. Yoshihara-san, I will give you the microphone.

This is Yoshihara from UBS Securities. First, regarding imaging, you are going to launch fully in U.S. this year. And you have 2 types of imaging is the first in the world. If other competitors have imaging products, too. So what is our key differentiation factor? Could you elaborate on your uniqueness? And looking at your competitors, the AI-based diagnostic support is something that your competitors are focusing on. You are still in the R&D phase, but you think that among this competitive environment, you believe that you can have success in this area. What kind of image do you have at this point regarding the use of AI. That's my second question.

Regarding our competitors, how are we going to win over them? I believe is your question. So as for our competitors, IVUS and OFDI thinking about this, spectral wave has been purchased by Philips, and that is the only company that has both. So Abotoni has one modality. So dual sensor uniquely sizing the fact that 2 sensors can be incorporated into 1 catheter, the size of IVUS and this can be mass produced. This technology is something that we pride ourselves in. This is the manufacturing capability of Japan that enables this, and that is the key selling point. Regarding AI, of course, a company is looking into the possibility of using AI and we are doing the development of the second version. This R&D is ongoing in a steady manner. And the timing of the launch remains to be determined. But itself will be launched in the first half of this year in the United States.

I think -- my second question. I saw the product that you introduced today in the room next to this, and it looks very competitive. I have high hopes for it. And apologies for this type of question that I'm about to ask. But the product that I saw is an extension of your existing products in my view. In terms of challenging into new business domains, there are acquisitions in the U.S. going on. and operation is something that the Chinese companies are also looking into. And so what do you think about your challenge going forward in this environment?

So regarding the details, since it involves external stakeholders, I cannot disclose fully. But we are looking into the areas of our existing business so that we can utilize the current sales force, but at the same time, utilizing new type of technology. That is the way forward for us. So we are doing the internal development of the technology, but also looking into possible external partnerships, such as start-ups and other type of new emerging companies, including the possibility of acquisition. And such that you have mentioned is something that we are currently looking to -- that concludes my answer. Thank you very much. Now we'd like to -- take a question from the second person in the second row Yamaguchi-san.

This is Yamaguchi speaking from Citibank. Dual Sensor or DualView, regarding that product, you have actually simultaneously installed 2 different sensors, and that was for the first time in the world. But cost-wise and technology-wise as well as unparalleled differentiating factor, there are many strengths. I believe. But how long did it take for you to redevelop this? And this is an unparalleled product that can be only achievable by Terumo and what is the differentiating factor here? Could you once again reiterate this?

For the details, TIS Global Marketing, Imaging Group Product Manager, Mason I'd like Maakan to respond to your question.

This is Matsuzaki speaking. I'm responsible for the Imaging business. Thank you for the question. Regarding the dual sensor system, there are 3 different components. It compares as one console and that project the imaging and also the capital as well as the motor drive unit. And the most significant challenge was faced by the capital part, because traditionally, we were in the imaging business IVUS and OFDI knowledge has been accumulated. Thanks to this technological accumulation, this evolution was achieved at stake as well as Terumo's scale for technology. This allowed us to combine that development by combining these 2 different sensors. And regarding the console in the United States, this is currently being developed and produced in the United States, TC-based or tissue-based it is. So ME device or the imaging experience was accumulated in this particular well, have been very limited at this particular site, but the Japan provided enough support by dispatching engineers and we were able to overcome these challenges and to enable the development of this product.

So by combining these 2 sensors, which is better? Or well, that's a usual pattern. But both centers can exert their full strength. Is that right?

Well, thank you for the question. So in terms of the characteristics of these 2 sensors, well, speaking of -- but well, there are the pros and cons with these 2 sensors and complementary with one another, we make sure that it is combined, those are combined complementary to one another. In the case of IVUS, intravascular penetration so that it reaches to the deeper side of the wall, but the imaging quality is rough compared to OFDI. But in the case of OFDI, then it gives us a clear picture if you are closer to the vision, but it is in the deeper side of the begin. The inner infrared cannot reach that far. So by combining these 2 types of sensors, both pros and cons are being canceled out so that only the strength can remain for both sides. Thank you for the question.

Next, thank you for waiting this person at the front row, please Kohtani-san from Mizuho Securities.

So I would like to ask a question about the DSS. So regarding penetration, first, you are thinking about the Japanese market and the European market, perhaps, although you need approval. So first -- but I think IVUS has been used in the pre stage. And then in the post stage, the stent is to remain and that will be done by OFDI. So that is something that you are looking into, I believe. But if you look at Europe and the United States, IVUS I'm not so familiar with it. But IPL requirement will be something that you will use in order to gain share commercially. Maybe your regional strategies differ from region to region, but I would like some insight. So how are you going to spread this product going forward is my question.

Thank you for your very sharp question. So when it comes to go-to-market strategy, Japan, U.S. and Europe are all different. In Japan, in the pre-stage, it is being used. And regarding Europe and United States, probably Matsuzaki can answer that. Yes, regarding Japan and the U.S., the 2 markets are different. For the U.S., we are in the initial penetration stage, we are launching the first time. So we have specific targets and some facilities that use imaging, Metro, for example, those are the targets. And imaging IVUS OCT, if it is already being used, then those physicians will be targeted and the dual sensor, the value of it can be understood better by these doctors. That is the starting point.

Just to confirm. In Japan and Europe, IVL requirement, IVUS and OCT, they have different scores. But in the U.S., is that the same?

Yes. When you say scores, this is scores, right? IVUS and OFDI has separate rating systems. If you use IVUS, you need to use IVAS grade system or OFDI then OFDI grade system. And once you see an introduction of the dual sensor tool, then new grading system will be needed. So the experts will come up with the new data and have a new grading system for more accurate treatment that is to be expected.

Okay Second question, regarding Kanshas. I'm -- I have high hopes for DRI DCB. But is it not penetrating so well because of the device selection region preparation, you need to use scoring balloon and the device limitation?, The risk level might be a hurdle that you need to overcome? Or maybe the clinical trials are not showing the results that you expected in the cohort testing. So I just want to know what are some of the bars that you need to overcome or pass in order to further penetrate the product into the market.

Thank you for your question. Regarding your point, exactly now where you're coming from. So Eyong, whether we are going to develop this in-house or not is something that we need to think about. It is still under consideration. So in order to expand in an exclusive manner, what kind of solution would be suitable is something that we are still considering. So what you just pointed out is a challenge for us in terms of the launch this time around. So we will make sure that we keep thinking. Okay. Thank you. Well, when it comes to treatment, as explained, Iliac from the stent will be used for treatment. That is the standard. For Emerald, DCB is the main tool. So from Mario to DCB, the length was not enough until now. However, 20% to 40% of the patients, they have both Emerald and femoral. Clearly, it's more like 50%. So from radial, you need a stent and femoral DCB. These are 2 treatments that are necessary, which will be a lot of burden for the patients. But if Kanshas is launched, then from the radial, you can treat all at once. So radial treatment, the percentage of it will increase. Thank you for the additional explanation.

In the interest of time, We'd like to take 1 more question.

This is Takemoto speaking from Nikko Securities. Regarding DRA, the mid- to long-term opportunity, I'd like to ask. So about the hemostasis device you just announced, but with this DRA adoption, sees as well as introducer related products will be too large for the DLA approach. So in the next midterm management plan base, are you going to update that to what extent are you going to update your access device for the next midterm management plan phase. Not just for DRA, but access products must become more minimally invasive, and that is an ongoing effort. And this is not definite yet, of course, but -- the grade cylinder, the current existing 1 can be made more minimally invasive. And that is ongoing. That is approachable through DRA applicable for DRA. My second question pertains to DRA competition landscape. So in the case of a number of cases, China is rising. And when we talk with Chinese players, they sometimes specializing DRA for their product development. And spec-wise, the coating excels terms the quoting performance, but the sizing for the in our diameter and exterior or outer diameter, they are very competitive. So are you going to be able to remain competitive in this DRA arena because you are about to update your products in the RA arena with the limited number of cases in Japan.

Thank you very much for the question. Well, of course, for the emerging markets. In terms of their manufacturing, Japanese manufacturing excels at design, for example, that the discrepancy between seas and radiator, we need to minimize those difference. And the quality must be sustained. We may -- we call it a homogeneity or consistency across the older access devices because access products cannot cause any quality issues set that joint ment aside, Access products cannot cause any quality-related issues in patients, and we are very careful not to do so in our production and design or R&D activities. So the design is meticulously planned, calculated and the consistent quality is maintained. That is in the essence of manufacturing, that is a tradition of Japanese manufacturing sector, and we'd like to maximize our strengths in doing so.

Time had to conclude the session. the QA session. Those of you who have questions, we'd like to take them during the group Q&A session towards end. And next, I would like to invite Mr. Sakaguchi, the President of the Medical Care Solutions Company.

Good afternoon, everyone. I am Sakaguchi, President of the Terumo Medical Care Solutions Company, or TMCS. Today, I will present our growth strategy looking ahead to the next midterm management plan for TMCS. In particular, I will focus on our key growth driver, the Pharmaceutical Solutions business, our PS business with a specific emphasis on CDMO. Let me begin with an overview of TMCS overall performance trends. Over the past 5 years, TMCS has achieved approximately 5% CAGR growth. In particular, the PS business has been strategically positioned as a key growth driver for TMCS and has delivered a strong growth with the CAGR of approximately 13%. Looking ahead, AMCS will continue to position the PS business as the core of its growth strategy, driving sustainable and robust growth. For FY '26, we are targeting year-on-year growth of plus 8% in revenue and plus 29% in adjusted operating profit. The primary driver of growth in FY '26 will be the expansion of our global CDMO business. In addition to continued growth in existing commercialized CDMO products, we will steadily advance the development of new projects. At the same time, we will continue to make strategic investments to expand production capacity in order to support future growth. Across TMCS as a whole, we will also consistently implement global pricing strategies to balance growth and profitability. I would now like to move on and focus on CDMO. Let me begin by discussing the global market trends. First, as a key underlying trend, the share of biologics within the overall pharmaceutical market has been increasing rapidly. In fact, biologics are growing at more than 3x the rate of small molecule drugs. Another notable trend is the shift in administration methods. administered for relations are expanding at approximately twice the rate of traditional hospital-based administration. This is driven by several structural change. This include the aging population and the increasing prevalence of chronic diseases as well as a shift in care savings from hospital stone-based care. At the same time, from a patient-centric perspective, this growing demand for more convenient and safer methods of drug administration. In addition, increasing pressure to accelerate time to market, rising cost constraints and the need to adverse regulatory requirements and geopolitical risks are making the business environment more complex year-by-year. Against this spectrum, what has become increasingly important, it's not only how to develop and manage drugs, but also how they are delivered to patients. As a result, the all expected of CDMOs is evolving significantly. From traditional manufacturing outsourcing, CDMOs are increasingly becoming integrated partners that combine drug container and design, thereby enhancing development efficiency and improving the profitability of successful commercializing. And this structure shifted strongly driving the growth of CDMO market. I will now walk you through Terumo's CDMO journey to date. Terumo has steadily developed its CDMO business over time, building on its technology and expertise in both medical devices and pharmaceuticals. In 1999, Terumo launched the polymer-based prefilled syringes in Japan under the Terumo brand. This lay the foundation for the CDMO business, establishing core capabilities in primary container technology and prefilled syringe manufacturing. In 2009, we entered the CDMO business in earnest with the launch of our first CDMO product in Japan. In 2018, through collaboration with Japanese pharmaceutical companies, we successfully launched CDMO products for the global market, steadily expanding our global footprint. In 2020, we further strengthened our mass production capabilities by launching new CDMO products and expanding production capacity. Entering the 2020s, the business reached a major inflection point. In addition to the construction of our new facility in, which you're here today, we acquired the Lubes side in Germany 2025 establishing our first CDMO production base outside Japan. Through these initiatives, Terumo's CDMO business has steadily grown, supported by the technology and trust we have built through commercial scale manufacturing. Today, we have entered a new phase of accelerating growth as a global CDMO. And next, I will explain Terumo's CDMO's key strength, in particular, the advantage of being a CDMO backed by a medical device manufacturer. The foundation of our competitiveness lies in the integration of expertise in both medical deposits and pharmiticals, as a medical device manufacturer, Terumo has built a strong track record in device design from development through to the mass production and quality management. At the same time, we have more than 50 years of experience in pharmaceutical development and manufacturing, with deep expertise, spanning manufacturing processes, quality standards and regulatory requirements. By combining this strength, we are able to develop primary packaging technologies tailored to biopharmaceuticals as well as the product designs, optimize for specific drag characteristics. In essence, the ability to design drugs and devices as an integrated solution is the foundation of Terumo CDMO development capabilities. A defining feature of the capability is our end-to-end in-house integration from primary packaging to final packaging. We are able to connect the entire process under a single design philosophy covering primary container development and manufacturing, aseptic filling, device assembly and final packaging. This integrated approach minimizes handovers between processes, enabling faster response in the vented issues, clear accountability and improved schedule reliability from development through to commercialization. Importantly, only a very limited number of companies worldwide can offer this level of end-to-end integration. In, this is not mere manufacturing capability. Rather, it is an execution model that enhances the certainty of bringing products from development to market and this itself is a core element of Terumo's competitive strength. Next, I will explain Terumo CDMO's business model. In a typical CDMO model. responsibilities are divided across different process stages, requiring pharmaceutical companies to manage multiple partners. As a result, coordination across processes increases and the overall complexity and risk tend to rise as development progresses. In contrast, Terumo adapts a one-stop model covering the entire value chain from development through to commercialization, excluding drug substance manufacturing. Importantly, we engaged with pharmaceutical companies as a partner from the early stages of product development. This allows us to minimize rework in later stages, significantly improving overall development efficiency and increasing the probability of a successful commercialization. Terumo is not merely a contract manufacturer. We designed drugs and devices as an integrated solution optimizing not only the product itself, but also how it is delivered to patients. This is Terumo's unique business model, one that clearly differentiates us from other CDMOs. Next, I will discuss the key growth drivers for FY '26. At the core is LEQEMBI and IQLIK, a collaborative product with Eisai. LEQEMBI, IQLIK is a subcutaneous formulation, which we believe has the potential to fundamentally transform the method of administration in the treatment of Alzheimer's disease. As the adoption of the subcutaneous formulation progresses, we expect a significant improvement in patient access, which in turn is likely to contribute to market expansion. With regard to development and regulatory progress, we understand that it is a base steadily in line with Eisai disclosures. Looking ahead, as the global rollout, particularly in the U.S. accelerates, Terumo is steadily establishing a robust and reliable supply system to meet growing demand. While we expect the full revenue contribution to materialize mainly from FY '26 onwards, we position this product as a highly important driver of mid- to long-term growth. Next, I will explain the value created by the LEQEMBI IQLIK. As a subcutaneous formulation, this product enables administration at home while significantly reducing administration time from approximately 1 hour within about 15 seconds. This represents a major transformation, not only by substantially reducing the burden on patients, but also by directly elevated workload on HCPs. The transformation is underpinned by Terumo Technologies. First, technology serves as a primary container that maintains the quality of biopharmaceuticals. In addition, it incorporates needle technologies that enable patients to administer even highly viscous formulations with ease as well as auto-injector technologies that support at home administration. This way, Terumo's value lies not merely enabling the shift to subcutaneous administration. But in translating this innovation into a form that can be widely adopted in will what clinical settings. In other words, Terumo plays is a critical role in transformed therapies into solutions that can be effectively delivered and used in practice. Next I will explain the acquisition of the and this progress to date. As background, Europe, especially the region around Germany is home to a large concentration of global pharmaceutical companies and demand for local manufacturing capabilities has been increasing. In addition, the plant offers advanced equipment and highly skilled personnel, which led us to conclude that the production system could be established within a relatively short time frame. Based on these considerations, we decided to acquire this site. Currently, we are steadily establishing our operational structure while advancing the installation of prefilled syringe lines compatible with projects. Preparations are progressing as the plan toward the start of operations in 2027. We are also seeing strong market interest with a steady increase in global inquiries. Importantly, the site is not simply an expansion of product capacity serves as a strategic platform to accelerate our development as a global CDMO. Next, I will discuss capacity and growth headroom in our CDMO business. To date, we have steadily expanded our production platform, not only by increasing capacity at the Yamaguchi of facilities in Japan, but also through the acquisition of the site. As a result, our production capacity has grown to more than 4x the level of fiscal year '17. Equally important is a headroom for future expansion. At each of our sites, Kofu, Yamaguchi and Lavakusun, we have already secured space to accommodate additional capital investments. Going forward, we will execute the necessary investments at the appropriate timing in line with the growth of the CDMO business, enabling us to respond flexibly to increasing demand. From a mid- to long-term perspective, in addition to Japan and Europe, we are also considering further global expansion of our manufacturing footprint, including the establishment of regionally integrated supply systems. In this way, we have already secured a certain level of production capacity while maintaining sufficient headroom to support further growth. Finally, let me summarize. Against the backdrop of structural growth drivers such as the expansion of the biopharmaceutical market and the shift in administration methods, Terumo's CDMO business is entering a phase of significant opportunity. With this environment, we have steadily strengthened our competitiveness by leveraging our integrated development capabilities that combine drugs and devices together with our end-to-end execution model. Furthermore, with the establishment of our manufacturing footprint in Japan and Europe, we are accelerating our expansion as a global CDMO. While we already have clear visibility towards achieving JPY 100 billion in revenue, we view this as only a milestone longer growth journey. Looking ahead, we will continue to strengthen our global supply capabilities, including the potential establishment of a manufacturing presence in the U.S. to support further long-term growth. With a clear ambition to become a leading company in the CDMO business, we are committed to delivering sustained and disciplined growth going forward. This concludes my presentation. Thank you for your attention.

We now take questions. If you have a question, please raise your hand. Starting from Mori-san in the row front row.

I am Mori from Nomura Securities. The first question about injector. IQLIK, I understand is from Vizamed. And but still still, you have injector technology at Terumo. So IQLIK may be different. But from the next model onward, are you going to have your own injectors essential. So can you talk about this space?

Yes. Thank you for your question. Yes, exactly. At the practice side, we have auto-injector made to each needs. It's -- we have a variety of objectives. We may have our own development. If there's something better aside, we will procure them. So we will make options accordingly and make decisions accordingly.

So can I understand that you do have the technology to make that, yes, the development is underway. The second question. CDMO sites, you mentioned that after your acquisition of the Leverkusen, you mentioned that there's a need for the local production. But things are changing. And I think many companies prefer the production in the United States. So are you going to impair and write it off, rather, are you going to start the U.S. right way, that could be a change in strategy how are you going to prioritize U.S. market?

Yes, understanding is that both in Europe and the United States, I believe there are needs. So for each local needs, we will need to respond to the respective needs.

Next question. Second row from the front. Hayashi-san please.

Hayashi from Morgan Stanley. I'm limited to 2 questions. So my first would be this. Regarding Leverkusen in Europe, and projects production will start in 2027. Maybe I had been mistaken, but you had some deals with European pharmaceutical manufacturer first and then the project starts running and then the sales contribution from Leverkusen will start to kick in. That was the order in which I did [Audio Gap] to develop. So I just want to know if you can walk us through how you were able to come up with this product.

You know a lot about the company on these products. Thank you. , this is anti-cancer drug, and this is going to be injected right after their treatment so that the metabolism can be improved. When we saw that product, we looked into the patient's pain points. And even after the treatment with the drug, they still have to go to a hospital. How could Terumo alleviate there burden, we can come up with a smaller needle and we can attach it to the abdominal part and we can have an automated system like issuing injection, for example. So we wanted to come up with something that is less of a pain to the patients, and that resulted in the body part for. And going forward, the pharmaceutical manufacturers would come up with their own drugs, and we will be the ones who would develop a better way of delivery. That is our role. We have been accumulating technology and that can be fully utilized in our ongoing CDMO business.

This is a follow-up question. So utilizing the existing technology, are you thinking of transferring that technology to a new product as it is?

Well, not really. Not as is, but it's a pump and it's a container. And something that can be used for administration after a period of time. Those may have a certain need. So we will make sure that we develop as needed.

We have however, the time is up. So we would like to conclude the Q&A session. Any questions that we were unable to take will be addressed during the final overall Q&A. From hereon, we would like to take a break of a little less than 10 minutes. We will resume at 1:20 JST. And those who are present here, you can take a look at the products in the neighboring rooms. [Break]

We'd like to resume the session. Next, we'd like to invite TBCT Company presentation. Unfortunately, Company President was unable to attend today, but we'd like to hear the company overview and strategy in Africa. Therefore, we'd like to invite the presenters Morimoto-san as well as Eyong-san on stage. Morimoto-san, the floor is yours.

Good afternoon, everyone. My name is Morimoto, General Manager for Japan at TBCT. Terumo Blood and Cell Technologies. It is a pleasure to speak with you today. TBCT is a cornerstone of the Terumo Group. Our work is built on a fundamental belief, blood and cells have the potential to do far more for patients than they do today. This conviction drives our innovation and transformation, transforms our relationships with customers from simple transactions into deep and strategic partnerships worldwide. We'd like to present 2 things with you today. I will begin by walking you through our company's overall performance and our key growth drivers. Then I'd like to pass the baton to Eyong Ebai-san, the General Manager for our African region. We will share one of our most important long-term growth opportunities in the African region. Here's the overall performance of our company. TBCT has delivered a robust top line growth throughout the GS26 period. By scaling Reveos, transitioning to VBP or value-based pricing, and penetrating the plasma market and expansion into the markets outside the U.S., we have consistently grown our top line. We are demonstrating a relentless commitment to margin expansion through operational excellence and portfolio optimization. For FY '26, we will further accelerate our shift towards high-growth investments. We aim for a 6% revenue increase and AOP margin of 16%, by continuing growing core businesses and implementing improving profitability of the plasma innovation business and by accelerating regional expansion. We are building a high-performance foundation for growth that will extend beyond the GS26 cycle. Now I'd like to step back here and show you the full picture of what Terumo TBCT actually does. Our competitive edge lies in our ability to integrate solutions worldwide across 2 distinct segments. First, in global blood Global Blood Solutions, we set the global standard for blood collection and processing. We aim to grow either plasma market as well. In global therapy innovations, we power therapeutic apheresis and the development and manufacturing of cell and gene therapies. We also provide software for these devices. Cross segment is beta solutions, which is our analytics and consulting offering. So we provide customers' decision-making support and this is an integrated infrastructure in our proposal to customers. We serve a wide-ranging customers, including blood centers and CDMOs. Although those customers are distinct, we are uniquely positioned to connect the entire chain. We collect blood and cells and we provided the technology that supports a safe and reliable supply, and we enable scalable precise blood and cell therapies. Very few companies span that whole continuum the way we do. At the lower indicates, please look at the market growth. Our core businesses serving blood centers and hospitals sit on stable mid-single-digit growth while biotech and CDMO fields grow at 17% to 20% growth. And these aren't just 3 separate businesses. They are on connected system following a single drop of blood from donor to patient. And this continuum and consistency is what shapes our future. I will explain in more detail next. Blood and cells are starting material for many advanced therapies in modern medicine without a reliable way to collect, process and deliver them health care system cannot function. We built the infrastructure that makes that possible anywhere in the world. This continuum of care by collecting and processing and treating. It is one integrated system that follows a single drop of blood from donors arm to a patient bedside. This continuum is rare and a key differentiator, and we do it with automation solution proposal and scaling. We secure our stable world blood supply by automating donor collection and ensuring component quality. We make every drop count through process automation replacing manual lab steps. And in the therapeutic area, our apheresis system is adopted and more than 80% in 80% of stem cell collection and next-generation cell and gene therapies. We extend this continuum by understanding where each market sits on. For example, resource constrained markets like Africa, where access to safe blood remains to be a significant issue. That is why we expand into new geographies. And expanding access means increasing the patients we serve. Our footprint is global, but our value or our impact is local. Now I'd like to pass the baton to Eyong Ebai-san to walk you through our business strategy in Africa, a key pillar of our mid- to long-term regional expansion.

Thank you, Moto-san. Hello, everybody. My name is Eyong Ebai, and I'm the General Manager for Africa region at Rumo VCT. It's a pleasure to be here with you today. I have the privilege of leading our work across one of the most dynamic growth regions in the world. And I'd like to show you why we believe Africa represents a real durable opportunity for this company. Let me start with the picture of the continent itself. Africa is the fastest-growing continent in terms of population. It represents 20% of the world's population today that will rise to 25% by 2050. And the population is young with a median age of 19. That really matters because a young growing population means decades of rising health care demand ahead of us and not a onetime bump. I want to make one connection explicit for this audience. While Japan's population is aging and contracting, Africa's working age population will grow by over 700 million people by 2050. And that can create decades of structural demand for health care products across the entire Terumo Group portfolio. So Africa is not a side bet. It's a long-term demographic complement to our home markets. The African blood collection market growth is outpacing global markets, and that demand is structural, driven by population and need, not by a cycle. At the same time, African governments are open and eager to collaborate actively looking for partners to fill capacity gaps in the health care infrastructure, workforce and technology. That's a rare combination, a large fast-growing market where the customer generally wants the partnership. Now this is not a single market. With 54 countries and 6 regional economic communities, it's many markets at once, and that's exactly why localization and hub model matters, which I'll come back to later. So the opportunity is real. It's durable and so is the need. And on the next slide, I will show you exactly where unmet need lies. Across Africa, preventable deaths from childbirth, trauma and sickle cell disease share one common dependency, which is timely, reliable access to blood. Sickle cell disease is one of the clearest unmet needs. 85% of all sickle cell patients are born in Africa. Imagine 300,000 newborns every year. As sickle cell obstructs blood flow, these children are at risk of silent stroke and the disease accounts for an estimated 2% to 5% of all deaths in Africa from children. Those who survive often face long-term physical and cognitive impairment. The same urgency applies for maternal hemorrhage and trauma. Every 2 minutes, a woman dies from preventable causes related to pregnancy and childbirth. In trauma care, several survival often comes down to whether blood is available in the first hour. And the structural imbalance is stark. Africa represents 20% of the world's population today, but accounts for only 4% of its blood supply. The need isn't only for more blood, it's for better blood processing. By separating whole blood into components such as red cells, platelets and plasma, a unit of whole blood can meet the needs of more than one patient. On average, only about 60% of whole blood collected is separated into components and very often done in a suboptimal way. So the core challenge is not demand, it's access and infrastructure. Blood systems remain largely manual, fragmented and constrained. That's both a public health gap and a significant untapped economic opportunity, and I'll show you next how we're addressing this. So how do we turn opportunity into reality? The answer is the Imara framework. Imara is the Swahili word for strong or firm, and it reflects what this framework is designed to do, build strong sustainable health systems and firm lasting partnerships across sickle cell disease care. We created the Amara because no single stakeholder can solve this problem alone. It mobilizes all the stakeholders, governments, NGOs, local health systems and funding partners around one shared road map for managing sickle cell disease across the continent. The framework works across 4 levels: primary interventions focusing on awareness, screening and early linkage to care. secondary interventions covering routine care, diagnostics and blood management and tertiary interventions handle specialized and complex care. And cutting across all of them is the work of monitoring, financing and program management that keeps execution on track. By convening multiple players, including public-private partnerships, MOUs with governments and support such as from the development banks, Ministries of Health, NGO and METI in Japan, Imara can unlock third-party and public funding to enhance sickle cell disease care across Africa, leveraging our technology. So we are not financing this expansion alone. The framework gives us both the funding base and the market access that the combination is what makes this opportunity real and derisked. You just saw the opportunity addressed by the IAA framework. blood availability directly translates into ability to deliver therapies. That's the gap our technology closes through 2 market strategies. First, expanding Revios adoption. Revios is a blood center in a box. It automatically separates 4 whole blood units into red cells, platelets and plasma in a single cycle. It does this more efficiently, more consistency with less waste. It's a proven model in the developed markets now scalable in Africa, a large underpenetrated market growing at 10.6% CAGR a year. Second, elevating sickle cell as a public health priority. Here, our strategy puts Terumo BCT across the entire sickle cell journey from diagnostics to treatment. Today, the pathway is broken. Testing often isn't available, so patients are diagnosed late or never and an undiagnosed patient never enters the treatment funnel. We address both these ends. On testing, our investment in Healthcare gives us access to Gazelle, a portable testing platform that can detect sickle cells in low-resource settings with no specialized lab equipment required. On treatment, our Spectra Optia automates red blood cell exchange, a therapy that rapidly removes sickle cells and replaces them with healthy donor cells. It is a guideline recommended therapy to control life-threatening complications such as stroke and recurrent pain crises. The key point, diagnosis isn't a separate business. It feeds treatment. As screening expands the diagnosed population, it directly drives red blood cell exchange demand, growing at 4.7% CAGR per year. We're not selling one product here. We're building a position across a whole ecosystem. And the prize is sizable. The addressable market for blood infrastructure is set to grow from roughly $700 million today to about $1 billion by fiscal year '31. And within that expanded market, we expect our Africa revenue to grow significantly faster at about 14% per year as we capture share across both strategies. A strategy only works if you can execute it and execution in Africa means being local. We've built our presence across 4 regional clusters: Francophone Africa, Anglophone West Africa, Southern Africa and East Africa with Kenya serving as our hub. We're establishing a training center in Nairobi to accelerate local talent development, building technical and clinical expertise because sustainable growth depends on local capability, not just imported equipment. We currently have 31 distributors covering 40 countries, more than 20 countries with good potential for generating revenue and over 10 countries with a strong established government relationships. So this is not a standing start. We've grown steadily since fiscal year '18 at about 6% a year, and we expect that to accelerate roughly by 14% CAGR through to fiscal year '31. The acceleration is not a hope. It's the result of repeatable execution model meeting structural and long-term demand. That's what makes Africa a durable growth engine, disciplined execution that combines real patient impact with sustainable shareholder value. And ultimately, all of this infrastructure exists for one reason, the patient. Let me close with them. To sum it all up, a health -- as health care continues to evolve, so will we, but we will always remain focused on patients and their unmet need. -- by unlocking the potential of blood and cells, we can help patients experience an array of conditions because blood delivers life-saving therapies. Modified cells can cure diseases and improve quality of life. Treated cells can offer alternative treatment options for patients. process blood can treat diverse illnesses. And that's why we will continue innovating, automating, expanding across -- expanding access and building for the future in every corner of the world. We are glad to have this time with you, and I look forward to your questions. Thank you

Question is from Yoshihara-san.

This is Yoshihara speaking from UBS Securities. On this occasion, to educate myself in Africa about Africa I'd like to raise questions. Well, first, of course, Africa poses a significant growth potential. In terms of its population of demographics, characteristics. But in terms business, what is the competitive landscape? And also yes, that is my first question about the competitive landscape and also -- what is your strength, the most strength that differentiates you? So this is a very basic question that I'd like to ask. In terms of your business in Africa and also, if possible, about the African region. Why was it important for you? Is it an indicator for the next midterm management plan that you are about to announce., if you could expound on this matter?

Well, to address the first Africa-related questions, I'd like to address Eyong-san Onsan to answer your questions.

Thank you, Tim. So from a competition perspective, the continent is very diverse and competition is extremely fragmented. And you have mature markets such as South Africa, Algeria and you have extremely underdeveloped markets. So the biggest competition we see is fragmentation and misalignment with regards to the need to execute programs in a holistic way. And that's why I talk about the Amara framework. -- the Amara framework is a comprehensive program that delivers funding product solutions training as one program versus a fragmented approach, which is currently happening on the continent. Secondly, I would say that the biggest competition actually is funding. And that's the reason why we've invested heavily in government affairs and market access because there's a need for us to work with governments to increase the amount of budgets that are allocated to health care. And then once those budgets are with the health care apartments, increase the amount of budget that's available to blood services. And you see that a lot in what we're doing currently with our government affairs and our market access policy. And one good example is in where we now have reimbursement for sickle cell patients from the National Health Insurance scheme that will give patients with sickle cell, 3 cycles of red blood cell exchange per year. So that's the type of example that we'll be looking at doing across the rest of the continent. And in regards to strengths, I think it's clear what I presented is that we have localized. We have built a hub in Kenya, which is Visa free for other African countries, so they can come and be trained and have access to training on a regular basis. It gives us an opportunity to engage with our customers within our environment, and it also allows us to build up technical expertise to ensure that our machines that are deployed across the continent. We have engineers on the continent that can ensure that they stay working. So being local, being on the ground and moving now into the regions of Africa because Africa is a very huge continent is one of our -- is a clear differentiator and one of our strengths.

Regarding Africa. Going forward, as Les explained right now, the economies are expected to grow further. On the other hand, in terms of their health care development, it will happen in phases. So at the initial phase of economic development, the very basic health care will advance. For the blood, blood is the essential part of the health care business. And in the case of Terumo for example, the cardiovascular region, advanced specialists must be trained and capital lab and operation rooms must be constructed or are very expensive tools must be purchased. So there are many different elements. So economically, it will happen in the later stage of economic development in those advanced health care segment. So that is the characteristic. So for the time being, termed Africa, provide an opportunity for us to provide a very basic elements like the blood TBCT business that can provide the solutions for the entire ecosystem. So TBCT is the leading edge in terms of further advancing our business in Africa for the entire group. But what does the TIS do? We are trying to train a specialists by partnership by providing partnership and training programs to the local with local institutions or for example, the procedural level is elevated for the local African specialists. But in terms of market expansion, it will happen at a later stage. GS31 will address -- of course, I focus on the Africa, but the TBCT will be the leading edge for the entire group. Thank you for the question.

And I'd like to ask a follow-up question about the funding. In other areas, U.S. funding slows down -- is slowing down. That is what we hear. But in relationship to Terumo's business, you have cited an example in Kenya. Do you experience the same sort of funding from the U.S.? And how do you overcome the situation?

May I? Okay. Thank you very much for the question. Well, for the time being, as Eyong-san Iona mentioned currently, the METI is funding our initiatives in Africa, Reveos is being introduced under funding. So by collaborating with the Japanese government, we are making inroads in or expanding in our footprint in Africa. And for other regions, in terms of our -- well, our competitors are also investing in Africa, we hear. But under the leadership of the Japanese government, in order to create health care markets in Japan and the government is investing. So we'd like to gain this momentum so that we can establish our footprint in Africa. In terms of the size of our business, it's not sizable yet. But TIS local training program for the specialists in Africa, that is under the leadership of program, we are partly funded by Rika.

Next, Kohtani-san please.

Kohtani from Mizuho Securities. I don't know whether it is appropriate as a question. Without is concerned. In case of CSL share price, I have feel some concern. And the plasma itself currently, well, it used to be a growth driver as people thought about inventory adjustment and other matters take place. So just like to know is that with the growth of Africa, company via some other products be, but can I understand that the market growth of Rika still remains at a single digit, higher single digit. And if you look at adoption by other companies, there has been some delay. But do you still maintain the same guidance in terms of the growth of the Rika market? Or do you think that the market is more difficult than you anticipated?

With regards to Rika, let me respond to the question. As we mentioned, CSL and now Rika is mostly like one-on-one. In case depending on CSL, this will also impact the performance of Rika. That's the current situation. So from our perspective, it's not just the CSL alone, but we should also think of how we can promote this to other companies, and that is the challenge that we are taking up. Overall, with regards to the market growth, we don't know the separate product individual growth, the market growth itself, we expect the growth of the market. That is still our understanding. So it's not that this is just a single CSL source. But when it comes to plasma treatment, we still want to continue this challenge and take up this challenge.

The clinical apheresis, when you look at what it's being used for, so you got TTP, you've got, you got myasthenia gravis, but it just all pales compared to the actual volume that sickle cell disease is. And obviously, it's a very endemic disease in Africa. I've always thought that you needed data, I guess. I think there was an ARCA trial that was supposed to proceed to provide data to show that the red blood cell exchange is pretty obviously better than what exists. But I guess from your point of view, it's not really data then. It's really more funding. I guess the clinical outcome superiority is probably -- I'm trying to understand how it's understood in Africa. The debate over the clinical usefulness is pretty much -- is it already settled and it's really just funding and insurance and all of that. That's really, is that how we should understand? Is there a possibility that you could get, like, say, Bill Gates Foundation, WHO, those sort of guys involved because that obviously would help with the penetration.

Yes. Thank you very much for the question. And you're absolutely right. I think on the question of data, there is data to support red blood cell exchange in the treatment of sickle cell disease in reducing the crisis. And you see data coming out of the U.K. There's some data coming out of France. We are also investing heavily in locally generated data on the continent. We've invested in medical affairs within Africa, and health economics in Africa, and we're currently engaging with a number of sites to get local data, but if you look at the policy documents that have been released in the last few years, just this year alone, WHO has released a document related to sickle cell disease. Africa CDC are about to release a continental plant for the treatment of sickle cell disease on the continent. And all of them are supporting the use of red blood cell exchange as one of the treatment options. Asia guidelines also are referenced at red blood cell as a treatment option for sickle cell disease. So I think from a policy government guideline perspective, I think it's very clear that red blood cell exchange plays a significant role in the treatment of sickle cell disease. So on the comment around reimbursement, that is a challenge. This is a marketplace that we have to build, which is why we, as I say, we've heavily invested in government affairs because we need to work with the Ministries of Health, Finance across Africa to ensure that they have the right health insurance schemes that cover patients that require red blood cell exchange. And you're seeing that with the country-level guidelines as well. So once the guidelines come, the funding typically follows. So I can look at Ghana, Tanzania, Uganda, Ethiopia, there are all countries that have recently come out with guidelines that red blood set exchange should be available for their citizens, and it's for us now to work with them over the coming few months to ensure that, that converts into funding of their health insurance schemes, which ultimately will fund red blood cell exchange, which will ultimately turn into a growth driver and a revenue driver for Terumo.

The time has come to end the Q&A session for this particular session. And those of you who have questions, we'd like to take them during the group QA session towards the end. Next, Mr. Craig Marshall, former CEO of Organ Technologies and currently an adviser to the business, will give a presentation. Although Mr. Iwata, assumes the role of CEO in June, on June 1. Today's presentation will be delivered by Mr. Marshall, who has led the growth of the Organ Technologies business to date. Craig? The floor is yours.

Hello, everyone. I'm Craig Marshall. Thank you for joining us today. Having traveled from Oxford in the U.K., I'm very pleased to be here with you as I share some insights to give you a deeper understanding of organ transplantation and our work in this area. To begin, let me briefly walk you through our recent performance. Terumo Organ Technologies, formerly is forecasting to continue to experience high levels of top line growth. Year-on-year growth is forecast to be 40%. And in the current fiscal year, taking revenues from JPY 18.1 billion in the prior year to JPY 25.5 billion in the current year. Adjusted operating profit margins are expected to remain at 20%. The growth drivers underpinning high level of revenue growth are continued increase in market penetration in addition to an underlying increase in the volume of transplants. In the longer term, the launch of the next generation of devices are expected to support revenue growth in the existing and in the new territories. It's very important to understand the underlying demand for organ transplantation globally far exceeds the current supply. This indicates that the organ transplant market is still far from saturated. We can be confident that any increase in the supply of organs will be absorbed by this underlying demand. There are 2 issues which have historically very much limited the supply of donor organs, which were considered to be viable for transplant purposes. Both issues are linked to the traditional method of deploying an ice box to preserve the organs. The primary issue is the lack of oxygen received by the donor organ, which, in turn, reduces the time window to transplant the organ. The second and associated issue is the inability to assess the viability of the donor organ prior to a decision to transplant or to discard. When we look at the quadruple aim of health care through the lens of traditional organ storage using an ice box, we see in each quadrant how limited this approach really is. From the patient perspective, their experience is compromised, owing to the relatively long recovery times in hospital. From the perspective of the wider population of patients, there is a very high risk of no transplant and, therefore, a lack of hope in the system. And from the perspective of the health care professionals, the traditional approach results in a very poor work-life balance, driven by the underlying urgency associated with each and every transplant. And finally, from a cost perspective, there is an unnecessary high burden linked to complications and readmissions for many of these patients. However, Organ Technologies addresses the challenges of traditional organ preservation head on by providing the donor organ with the supply of oxygenated blood via its proprietary technology, automated normothermic perfusion. This means that donor organ is literally brought to life, and this safely extends the preservation period to at least 12 hours. The approach informed by human physiology gives rise to a number of logistical benefits. -- such as the potential elimination of nighttime surgery. Furthermore, consequences of normal thermic perfusion is the opportunity to reliably assess the viability of the donor organ with confidence. This typically results in an increase in the proportion of organs that can be transplanted in the range of 10% to 30%. The 3 pillars which describe automated normothermic perfusion are. Firstly, the extended preservation period. Secondly, the increase in the number of transplants. And thirdly, the superior outcomes for these transplanted patients. The full impact of automated machine perfusion is best appreciated when viewed through the lens of the quadruple aim of health care. For patients, there is a reduced length of stay and a reduced rate of complications. For the wider patient population, there is significantly increased hope of a transplant and a reduced time waiting for the transplant to happen. -- for the health care professionals, they are able to radically improve their work life balance and enjoy a far more sustainable and rewarding career with significantly reduced risk of burnout. And finally, the overall costs associated with the transplant program are reduced owing to the reduced rate of complications and staff burnout. This highlights the many ways that organ technologies contribute to society through health care, which, of course, the group mission, which is, of course, the group mission for the Terumo Group. There are a number of key differentiators of normal thermic perfusion product, metra. For example, it is thanks to the integration of the Terumo CDI blood gas analyzer that metra is an automated and intuitive platform. It allows organ technology staff to train its customers, empowering them to redefine the organ transplant program at their hospital. Following the acquisition of OrgaNox in 2025 by the Terumo Group, we are now beginning to realize a number of key synergies following the integration activities. These synergies are now being realized across several functions, such as R&D, manufacturing, logistics, regulatory affairs, quality IT and last but not least, sales and marketing. So when we look to the future, Organ Technologies is working on a very exciting pipeline of future products, which harness these synergies linked to the acquisition by the Terumo Group in 2025. The next generation of devices will not only be more compact later, but will benefit from having a platform architecture and cloud connectivity, which will drive productivity to unprecedented levels for our customers. The first of the new generation of perfusion products will replace the current metra, therefore, serving the liver transplant market. The second of the new generation of perfusion products will target the kidney transplantation market. The future kidney perfusion program builds on the positive first-in-human experiences namely the 36 subject study, which was published in 2025. At the recent IT international liver transplant society meeting in Geneva in May this year. We hosted a tech suite, allowing established customers from Europe and North America to see the new design of the liver the fusion device. The feedback was very positive, indeed, confirming all the major opportunities to improve the current product have been addressed in the new generation of device. Thank you. This concludes my presentation, and I would welcome any questions you may have.

Now we will go into the Q&A session.

Sorry, in Japanese, this is Tokumoto from Nikko. So you are talking about new generation technology. So this blood gas center is now incorporated. This is a huge factor. So the pump also is going to be used in the design. Your own pump can be used. And so what would be the cost to capture difference when we enter into this new generation product?

So there's going to be a favorable -- it's going to be more of a tailwind than a headwind when we are now part of the Terumo Group for sure, having internal transfer prices rather than an external price. Final cost position has not been determined yet.

I have a question regarding this new technology of normal thermic machine by fusion, but your competitors are targeting other organs. And you are talking about the liver, kidney -- and then for expanding modalities is something that you are thinking about. So are you going -- in terms of technology, what are the new advancements we can see down the road?

Beyond liver and kidney, the next mostly is organ, which would be of interest in terms of the volume of organs that are transplanted is the heart. And the opportunity is being explored to understand how we could address unmet needs in cardiac transplantation. So in addition to normal thermic machine perfusion, there's -- obviously, there's an alternative in the form of hope. The limitations of that approach are very much around the duration period and the inability to assess the viability of those organs -- if we think about the U.S. market today, the only AMP product is the Vitasmart from Bridge to life. I would highlight that, that is not a transportable product either. So I think it's hard to compare the limitations of an AMP product with the NMP platform we've developed in Organ Technologies, but it's certainly fair to say it's significantly better than an ice box, but it's a long way short of normal thermic machine perfusion in terms of the proposition, it presents to clinicians.

Before joining the Terumo Group, Organox had a relationship with Terumo prior to the acquisition, but why did you choose to become part of Terumo? What was the rationale behind the motivation?

I'd say the motivation was at 2 levels. From an engineering perspective, the Organox business and the Board were hugely impressed by the depth of manufacturing across the group, the degree of vertical integration, the obsession with quality, and the depth of understanding and the proximity to customers. So having this staying within health care for more than 100 years deeply impressed the, shareholders and Board. Secondly, I would say that our values were strongly aligned as a British business established by essentially a doctor, we felt we had an awful lot of DNA in common when we got to know each other during the due diligence process. And I think both of those factors were material in this acquisition from my perspective.

Next, Yoshihara-san please.

And I got kind of your -- I would like to check your competitiveness versus TransMedics in the U.S. market. It might be a little bit very specific things, but I understand that the business model is different. As a result, your product has a very high cost competitiveness in U.S. market. But on the other hand, as far as I understand, because of the business model difference between you and competitor, some doctors is arguing that maybe graft survival rate could be higher at the competitor versus yours, simply because the time the liver organ put on the pump is maybe quick competitor, but it's maybe rate timing with all the docs or sorry, -- you the limit company, I'm sorry. But -- so then how you overcome this gap? I'm a little bit worried that now I think you are expanding the market -- but in the future, more data is available. If doctor noticed that the graft survival rate is lower at, that might be disadvantage. So that's my question.

Actually, the 2 questions I'd like to address there. One really is about the difference in our business model. And actually, we've now closed that gap. So we're now able to fly the metro. So we can offer our customers the same model operating model as TransMedics do. And in fact, although it's currently embargoed because it's not yet been published. But by the time of the American Transplant Congress later this month, we will be revealing favorable results from our post approval study. which address that second point of graft survival. So it's -- you're forgiven for thinking that, but the latest data will address any concerns in that area.

Just a quick follow-up. You mean that you are going to do the similar business model?

We already do off a flight SP-16 Without owning aircraft, right? Without the expense of owning the aircraft, we operate with partners, so procurement partners and flight partners. So our customers pay directly those partners, but they can experience the same model as the TransMedics model, where they're paying a one price for a very that treatment. So yes, but we are -- we've qualified the metra for flight now.

But you don't do it by yourself.

We don't fly the planes. We don't own the planes, but we enable, we facilitate those conversations with our qualified and certified partners.

Just -- so I'm trying to figure out the difference between OCS other competition versus metra? Obviously, price business model, as you have said, but how important is the automation of the medication because when we go out into the future, if you really want to pay an arm and a leg for your competition, you could keep doing so. But not everyone can pay for the full service and you want to probably run the system you're on your own in the future, in which case automation becomes important. Is that how we should think about it? Or how should we think about sort of the automation as a competitive advantage?

So I would like to -- thank you for the question. I would like to just highlight the dependency in a very positive way on the CDI platform that we're measuring continuously the blood gases. So we've heard today of just about how important blood is in so many applications. And here, we have another one. We're providing oxygenated blood at the right level of oxygenation, not too much, not too little. And we can only guarantee that by constantly measuring the partial pressure of oxygen in the blood. And that's thanks to the CDI, which remains unique in the marketplace. And thanks to that, our customers, we can interest this sophisticated device into the hands of our customers after 2 days of training, and they for themselves can after these organs. And that empowers them, gives them agency in this space in a way that our competitors cannot afford to do the same.

So last question is about the metra. I guess you showed some slide on -- the final slide was on how the new customers are very happy with it. What exactly was the -- were the customers happy with? Is it the size of the machine? Or is it something else that you improved. If you could give us?

A combination, size is the most obvious difference. And the way we've achieved that reduction in size is by having a a version of the replacement to the CDI 550, the CDI 1 view as a dedicated piece of electronics for this application. So we actually predates the acquisition, but we've been working as a development partner on this for some years now. And that will be at the heart of our new generation of normothermia perfusion devices. And by taking really the active ingredient of the CDI and embedding that in the platform, we have been able to reduce the size by not having a second screen, for example.

So the conclusion is it does sound like automation is very important.

Automation has been and will remain so in the future. Thank you. Yes. a very much improved user interface and connectivity to the cloud. So those are other aspects, different battery technology, I could go on. But there's a number of different technologies which we are bringing into the clinic with this new generation.

We're looking forward to the full review.

Thank you.

So Mori-san, please

This is Mari speaking, Nomura Securities. About one thing on batteries. So you said that you are trying to minimize the size of the battery, you in order to perform the battery for 24/7 and how minimize the size? What is the smallest size of battery that you should achieve?

The battery has moved to lithium-ion. So it's inherently -- it's like a laptop battery. It's a much smaller compact affair than we've had in the past.

We take one more question.

t's a simple one question. Regenerative medicine, the regenerative medicine, so to speak, in the long run, could this be a threat to you? Because when I asked this question to Ran to TransMedics, the answer was, well, having said that, you have a transportation issue, a logistic issue. So the equipment will be very important. That was the comment I received from TransMedics. So what is your view?

I don't fully understand the question. I'm so sorry. Yes. I would argue, particularly now that Organ Technologies is a member of the Terumo Group that the advent of regenerative medicine is a much bigger opportunity than it is a threat. If we look about what's really state-of-the-art in -- with our associates in VCT and imagining some of the cell and gene therapy, what do you need for that? You need an oxygenated blood slide. You need multi-day perfusion. We've not talked about what we're doing outside of transplantation here today. But I think it's fair to say, and just to assure you all, we have experience of 5-day perfusions routinely. And that is a wonderful basis from which we can imagine combining some of the unbreaking cell and gene therapies into a future normal thermic platform. So I think it's far more of an opportunity than it is a threat.

We have reached the end of this session. So we would like to close the Q&A session for the Organ Technologies. We will now move on to the overall Q&A session covering all present.

This is Saito from JPMorgan Securities. I have a question regarding the German side for the CDMO business. As you stated, you are going to cater to the needs of both European and American markets. But our drugs are typically liquid drugs. So when it comes to U.S. made limited drugs, are you thinking about relining that to Germany and filling them there?

Thank you for your question. Yes, that is what we have in mind. In Japan and in Europe and the U.S., you can visit, you can have it frozen. But I think it is a liquid type, it would be easier for all pharmaceutical companies. Therefore, we are thinking in that direction.

Okay. The second question -- so regarding the German side, your strategy. So are you -- so you're having big projects and mid- to small-size projects. What is the expected ratio of the project size in terms of strategy? Where I'm coming from is this -- so what kind of candidate -- candidate drugs you have? And if your expectation changes, how flexible will you be to change your production is. That's what I am trying to get at.

We hope that we can have larger projects, obviously, as a majority, but depending on timing, we have multiple production lines to be installed in the German site. And depending on the line terroristic we can cater different needs. So not just the big projects, but we can do smaller projects. dependent upon the acquisition of the business. And also, our strength of Terumo in the CDMO business should be showcased. So those are some of the stat decisions. When it comes to large-scale projects, -- maybe you have changes in the drug midway. And if it's a pharmaceutical CDMO or you might have a situation in which you cannot fully utilize your tank. But on the other hand, if it's a device CDMO or how much flexibility would you be able to have physically depending on the change in drug. So basically speaking, it's not the size of the tank, but rather the orders coming in from the pharmaceutical companies will determine the filling capacity of ours. We have certain tanks, and it's not that we need to all have them full. Depending on the number of orders and the number of units, we will make sure that we can adjust our production level. So that means that you are going towards the larger scale projects. That's your strategy, and that's going to be the best case scenario for you. Yes, that's going to be most advantageous for us. So we will aim for that.

Any other questions from the floor? Yes .

I'm not sure where you are willing to answer, but I'd like to ask this question of -- what was the, biggest for you to have this out day to day? And you are about to make announcement in December for the GS31. But at this point in time, -- can you give us some indication about the next midterm management plan. The next midterm management plan, the previous one and the current one, the entire management team was involved in the formulation of the current MTP, but, this is going to be your -- the first entity under your leadership, and we have high hopes for that. Could you please comment?

Thank you very much for the question. Well, thank you very much once again. And we invited you on this occasion because that we wanted to demonstrate our strong fundamentals. But no matter how hard we try to penetrate our message very by showing our performance and indicators. It is not compelling enough -- convincing enough. So we wanted to have the presence of each company to deliver our technology and strategy to be in place. And for you to see it firsthand. Terumo has a 105-year history, and we have accumulated our alignment technology by combining multiple different factors and technologies in order to best fit the medical needs. We provide solutions and products, and we wanted to have demonstrate this. showcase this you firsthand, to convince that the Terumo has a strong core fundamentals and is willing and capable of achieving strong growth in the future. And that's why we have convened this IR Day today. And regarding GS31. It is to be finalized, and we are in a preparation base yet. But since I came on board, noncontinual growth will be the big theme inorganic growth that is. So we have presented today is the current state of affairs for each business portfolio and what is to be implemented going forward. But the new portfolio, which is the Organ portfolio, OT business, but we would like to explore some other business opportunities. And from a high level, we'd like to present the GS31 in December.

I heard and presentations today, and we understand that your strength comes from the fact that each one of you is working hard to solve the patient needs at clinical practice setting. We can understand that fully. And through the presentations, you talk about consistency end-to-end. So from the very beginning of the and management going into the delivery. You have an end function. And I understand that this is your -- one of your core strengths and you utilize for your next midterm plan. You have various technologies, various elements that can be combined to be developed. But from the point of view of per time schedule. Sometimes it may take too long, sometimes you may miss an opportunity because of the delay. How can you enhance these elements and accelerate your development pace sometimes, I would understand that you have to revisit your current project and to further evolve your development for,what is your view?

Yes, exactly. That is the very point of my forecast since me assuming this position, we have managing directors san into innovation. And -- we had people in charge of corporate R&D, people in charge of IT, people in charge of clinical practice and people in charge of regulatory affairs, but all these people, they need for innovation and also takes kind of innovation. So it's not just the internal development, but for external technology acquisition, single person can make decisions altogether comprehensively. In the past, we had R&D team for each business unit and a cross-functional communication was not very strong, but under his leadership. Each President, each R&D, each company, people can work together to look at the know-hows and foundation, which serves us the core. We have more communication to make use of this and one of our core technologies, which are introduced in my presentation at the very beginning, we have according technology. In Southern California, we have a satellite office, which is the new corporate R&D. And by this year, we will be able to hire local academia connection and local engineer, exchanges, with and further accelerated technology. So we need to have innovation generated in a timely manner. And this is one of our top priorities.

So each decision has to be made quickly promptly. And you mentioned that you really -- when we talk to the people on the side, you have various gates, of course, for safety and quality that may be needed. But if you have to go through many gates, how can you change the decision-making possibility?

Yes. for medical devices and also pharmaceuticals, the quality management system is a system where we need to comply with all the requirements. And what I often say is that, of course, quality is the basis of what Terumo strength has been supported, but in details, sometimes they even over that we raised the bar in terms of the reference and the standards too high, so to speak, sometimes internally. And I have that experience when I was heading the company unit. So by reviewing this revisit them, QNS, of course, is very important. We have to be sufficient and well prepared for this. But it shouldn't be an extreme burden. And in the Southern California, in order to promote development there at the different QMS, we will be able to have fast development. We want to establish such a technology capability at Terumo Group.

We should be looking forward to the next set our rich pipeline.

Yes, we'd like to do our best so that we can introduce which pipeline

Next, Hayashi, please.

This is Hayashi from Morgan Stanley Securities. Today. This one, cardiovascular company. If I did not miss it in the slides, imaging equipment, the future growth, you are expecting that to happen in the U.S. first, and then you are expecting China to grow too. However, when it comes to your sales, Japan, U.S., India were the top 3. So what is your outlook on China? What kind of stance are you going to take? Do you have any challenges that you are foreseeing in terms of selling imaging equipment in China?

So we have the product and marketing manager for Jing Matsuzaki. So he will take that question.

Yes. As you pointed out, when it comes to global markets, China is going to be a growing market in our outlook. Looking at the current market situation, I think it is steadily growing. So we would want to get into the market, and we are considering ways in which we can make the entry.

So you have a Chinese subsidiary, but is it difficult to do just to your subsidiary? Do you need a local partner?

Well, regarding our portfolio goal, so we have the dual system and IVUS system. So we have 2 portfolios, and we will make sure that we will optimize our product lineup to the market.

Next question is

This is Ray speaking. I'd like to ask a simple question. During the presentation of 4 companies, One is this Center, Reveos and Kanshas, CDMO. Revenue-wise, what is the priority in terms of these 4 different companies? In terms of the size of the revenue, what is the order for these 4 companies from.

Well, thank you very much for the question. Regarding DSS and Kanshas, these have a very significant growth potential. So reviews will be the top one in terms of the revenue contribution. That is the most top element. In terms of the size of revenue, Reveos is going to be -- remain the top -- and as we introduced today, in terms of the growth potential, each 1 of these 4, during the GS31 period, they will be the growth drivers. And that is a level that we'd like to achieve. And that's why we introduced with the sense of hope.

And for the Orion transplant, I'd like to address this question of Craig on if I may, what is the downside risk for this organ transplant business? What will be the downside risks?

I'm struggling to think of a downside risk for our high-growth business unit. I guess a downside risk could be something which is currently unforeseen deep in the supply chain that could trip us up. But we've got real resilience now. It's got -- it's better than ever before. But when Organox was a small company, those sorts of risks kept me awake at night. But that's one of the things that we've now been able to very much address as part of the Terumo Group by building in dual sourcing and much better resilience levels. But for any medtech company, -- it's something that happens in the sterilization plant, which is supplying a supplier who supplies you. That's the kind of thing that can happen. And we just have to remain paranoid in our supplier audits and our quality assurance procedures that we are on the front foot with all of those risks. But I wouldn't single out anything, but just what comes with the territory of operating in a highly regulated market like this, where we are dependent on third parties ultimately for our suppliers.

There were several questions asked in that area. From a pipeline perspective, I think you have much foreseeability and much ahead in the future. And in that sense, -- in this area, I understand that the demand is increasing. But is it better than you have expected in terms of your pipeline? coming out, but we can't see the numbers be very clear about the pipeline. Can you give us some indications?

Thank you for the question. LEQEMBI can be following LEQEMBI Mediaeval products, and it is under development. It is odd the core development stage. In that sense, in a continued manner, we will be launching various products. But in principle, these are the projects of the pharmaceutical companies. So we cannot make a disclosure as to what they are, but there are several co-development projects underway. This may be often asked questions. Is any related to?

Well, project -- so I have a question about related. It's not very clear at this point on that. that clearly included, No? Right. It's not clear to indicate. About DSS, this has been often explained, and the potential market and the potential growth well explained and your target market and the target share haven't been clearly mentioned. But if you look at this product profile and based on your past performance and track record, excluding the market access, what is -- how much do you think we can again, can you give us some potential?

Thank you for the question. DSS, without the DSS at the moment in Japanese market, we have the leading position. And with DSS, we will have some increment. And in addition, the existing products are replaced. So putting them together, we will have further stronger, even stronger acquisition than now. What about U.S. Well, U.S. you could speak on that, please?

Yes for U.S., we follow up in the U.S. market, we have unique technology, but the competitors are already in the market. So after launch, it's difficult to say this by 2 digit is what we want to aim at. And it may take time, but with the center system in a clinical setting, we can cover almost all case loads. So we do want to aim for 2-digit.

Next, Kohtani-san, please.

Sorry for asking so many questions. My final 2 questions. So what request may be. So a number of launches. If you can disclose that this is a diagnostic business solution. And it's hard to go and look at the individual labels. And it's hard to really grasp the growth. There are so many projects, and you're focusing generic products right now. And I know that there are some that you cannot disclose, but it would be nice if you can disclose further. This is a request.

Well, we will try. How should I say it? And how far can I go Projects for we can say it's not 1 million level or single million level, but it's 10 million of level. Is that what you're looking for? Why are the supplier is not willing to disclose such information? Well, there are several explanations. For example, cybersecurity is one. There are many factors. So the pharmaceutical companies do not want to make clear what they are asking to whom. Easai was okay to disclose this information. And it's dependent upon the pharmaceutical companies. But if you can just discuss the project -- number of projects for TMCS, that would be helpful.

Undiscussed I can't think of anything bigger than defatting of the liver, reconditioning because if you have fatty liver, if you try to use it for transplant, you're going to get reperfusion fusion injury. I think that's pretty well known. So -- and I'm assuming that a lot of liver you find tends to be fatty liver. So there has been some early studies done taking a fatty liver, injecting drugs, maybe filtering, slim it down so that you can transplant. This will open up a vast opportunity, I would think. Where is Terumo in the sort of development or possibly usage clinical usage of fading and reconditioning in general. That's my final question.

We're about halfway through a study that's not yet published, where we've been doing exactly that.

Would we get the name of the study or when this will be announced?

I'll provide it later for you yes.

Is it within a couple of years or is it further out?

It's within that sort of time frame, yes.

I come to conclude this overall Q&A session. Those of you who still have questions, please contact the IR department individually. Now to close the session, we'd like to invite our CFO, Hagimoto-san, for closing remarks. Hagimoto-san, the floor is yours.

This is Hagimoto speaking. Terumo CFO. Today, we have introduced growth initiatives and products driven by our core technologies. To reiterate, Terumo's growth is based on a scalable and repeat growth model centered on core technologies, which continues to generate new growth drivers. In the next MTP, mid-term management plan. We are making steady progress in both growth and profitability, and we'll continue disciplined investment by allocating resources focused on these growth areas. I'll outline our IR-related activities for this fiscal year. We will continue to hold quarterly earnings call as usual. And this will be continued to give you an update on our performance. As for the events, In addition to today's IR Day, we are planning to have a technology focus briefing. Well, today, we focus on business as well as the strategies. But and technologies, but we are planning to have a technology focused briefing at a later date in shown up at projects. And in December, the GS31 announcement will take place. And the technology-focused briefing will be in October. Through these activities, we aim to provide not only performance updates but also deeper insights into our growth drivers and technological foundation as to why these are contributing to Terumo's growth. We will continue to engage in the dialogue with you to enhance your understanding. So through these initiatives, we'd like to contribute for the betterment of your understanding. And today is the first step. We have convened this IR Day event and thank you very much once again for your participation out of your busy schedule. And that concludes our IR Day event. Thank you very much.

And this concludes IR Day presentation and broadcast. Thank you to everyone who joined us online. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]