Thank you very much for your participation in this FY 2022 second quarter financial results earnings call. I'm Ikeda from Corporate Advocacy Relations, serving as the moderator for today. Thank you very much for this opportunity. This call is given via Zoom webinar as well as the live streaming. We make the presentation first, then we'll have Q&A session afterwards. The questions can be accepted only from webinars, not from the live streaming. The simultaneous translation service in Japanese and English is available. For those participating with a Zoom webinar, from the Zoom screen menu, please select your preferred language. Today's presentation is going to begin, given in line with the presentation material on the website. The participants for today, Representative Director, President and CEO, Kenji Yasukawa, CSO, Chief Scientific Officer, Yoshitsugu Shitaka, CFO, Minoru Kikuoka, CMO, Chief Medical Officer, Tadaaki Taniguchi. These four are here with us. Matsui, Chief Commercial Officer, is unfortunately unavailable because of his overseas trip. All sessions including Q&A will be held in Japanese and simultaneously translated into English by interpreters. Accuracy of interpretation cannot be guaranteed. The material or presentation and answers and statements by representatives for the company in the Q&A session includes forward-looking statements based on assumptions and beliefs in light of the information currently available and subject to significant risks and uncertainties. Actual financial results may differ materially depending on the number of factors. They contain information of pharmaceuticals including compounds under development, but this information is not intended to make any representations or advertisement regarding the efficacy or effectiveness of these preparations, promote or approve the use in any fashion or provide medical advice of any kind. Now, Mr. Yasukawa, please. Hello, everyone. Yasukawa speaking. Thank you very much for joining our FY 2022 second quarter financial results announcement meeting on your very busy schedule today. Page two is a caution statement regarding forward-looking information. I'm going to skip reading this page. Page three is the agenda for today. I will cover these topics in line with the agenda. Page four is an overview of FY 2022 second quarter financial results. I'd like to start explaining from this page. Revenue and profit increased in the second quarter. Revenue increased by 17% year-on-year and was on track when Forex impact was excluded. As for Xtandi, sales in the United States were below initial full year forecast, but strong performance in Europe and Japan covered the underachieving performance in the United States. PADCEV showed a strong performance mainly in Japan and sales exceeded our initial full year forecast. COGS ratio was higher than our initial full year forecast due to changes in the product mix. As we announced last week, considering recent rapid exchange rate fluctuations, the exchange rate used for eliminating unrealized profit was changed from the second quarter to exclude the impact on profit. Please see slides 20 and 21 for details. SG&A and R&D expenses were controlled in line with the initial full year forecast, excluding Forex impact. As a result, core operating profit increased by 16% year-on-year, even excluding Forex impact, and was in line with our initial forecast. Full basis operating profit increased by 33% year-on-year. Next on page five, I will explain FY 2022 second quarter financial results. Revenue increased to JPY 622.2 billion, up 17% year-on-year. Core operating profit was JPY 145.4 billion, up 16% year-on-year. You can see the Forex impact column on the right-hand side of the table. Revenue increased, and profit increased by 4% and 3.3%, even excluding Forex impact. As I explained on the previous page, second-quarter cost of sales does not include Forex impact from the elimination of unrealized profit. On the other hand, we are not restating our historical consolidated financial statements. The Forex impact of the elimination of unrealized profit for JPY 0.6 billion remains in the second quarter of FY 2021. The bottom half of this page shows our full basis results. Operating profit was JPY 119.9 billion, up 33% year-on-year. Profit increased to JPY 96.4 billion, up 34.7% year-on-year. On page six, let me explain the second quarter results and the future outlook for Xtandi. Due to substantial Forex impact in the second quarter, we are showing the results in local currencies as well. First, global sales reached JPY 332 billion in the second quarter, up by 24% year-on-year. Up by 9% when Forex impact is excluded. Up to the second quarter, the progress was in line with the full-year forecast. We explain the outlook for the future later, but we continue to expect the challenging market conditions in the United States. We have made a substantial downward revision of full-year forecast in the United States. We are making an upward revision of a full year forecast in Europe and Japan with strong performance, which is not sufficient to cover the downward revision in the United States. Full year forecast of global sales excluding Forex impact is revised downward. On the other hand, in spite of the downward revision, we are expecting continued near double-digit growth even with sales already exceeding JPY 600 billion. Next, let me explain the current situation and the future outlook for each region. In the United States, second quarter sales reached $1.304 billion, growing by 1% year-on-year. 1% based on the local currency. Continuing from the previous quarter, there has been a negative impact from the so-called PAP, patient assistance program and competitive Zytiga generics. We were expecting the recovery in our initial assumptions, but their levels remain higher than our expectations. New patient starts have not returned to pre-COVID-19 levels and are below expectations. We are assuming that the duration of treatment with Xtandi is 18 months on the average due to a drop in new patient starts one to two years ago when COVID-19 has the biggest impact. We believe that demand as a basis of our current sales is also being affected. These factors, including PAP, have a lot of uncertainties. Without expecting an improvement for now, we factored in the challenging market conditions for the third quarter and beyond. As a result, we decided to revise our full year forecast downward to $2.618 billion. Comparing the first and the second half, it may seem that we are not expecting growth in our plan, but this is due to the impact of the so-called donut hole or coverage gap on our price in the fourth quarter. On demand basis, we are expecting an increase by a higher single digit percentage figure in the second half compared to the first half, so we are planning to grow based on the actual demand. As you know, more than 10 years have already passed since the launch in the United States. Sales have grown to a scale of $2.5 billion on a full year, JPY 252.5 billion on a full year basis. In the current indications, big market opportunities are not left for us, and Xtandi is shifting to a mature phase in our view. On the other hand, as a future growth opportunity, EMBARK study is ongoing, with which we are aiming to obtain an additional indication of M0 CSPC. We're expecting top-line results by the end of the current fiscal year. We're expecting for its contribution to sales after approval as a growth driver for FY 2023 and beyond. Next, established markets. Established markets are above initial forecast and contributing to the expansion of global sales the most. Prescription for early-stage M1 CSPC showed strong growth mainly in Germany, while Italy and Canada also contributed as well with the start of reimbursement for M1 CSPC, so demand rose substantially by 21% year-on-year. As for the price, we were able to reach agreement on the price higher than our initial assumptions in reimbursement negotiations in Germany. We reflected these positive factors and made an upward revision of our full year forecast. In Japan, as a result of active educational and promotion activities by us and our competitors, we are maintaining a high market share in the growing market of novel hormonal therapies with the market expansion higher than expected. Reflecting the situation up to the second quarter, we revised our full year forecast upward. In Greater China, demand expanded substantially, but due to the impact of intensifying competition, progress is slower than our initial forecast. We are expecting competitive pressure to continue in the third quarter and beyond, and made a downward revision of our forecast. However, we are continuing to see Greater China as a growth market. In the international markets, performance looks strong, but that's due to early shipment. Excluding that factor, performance is in line with our initial forecast. Excluding Forex impact, full year outlook is in line with our initial forecast. We have expectations on international markets as a growth market like Greater China. In the United States, Xtandi is approaching a mature phase, but others outside of the United States, we have expectations for Greater China and international markets in particular as growth market. We continue to expect sales expansion globally as a whole. Next on page seven, let me explain our strategic product. First, on PADCEV. Global sales grew to JPY 20.8 billion, exceeding our initial expectations. Countries with approval expanded to 41 countries. Regional expansion is making steady progress. Factoring in the strong performance mainly in Japan, we revised the full year forecast upward. In the United States, PADCEV is growing in line with our initial forecast. We already achieved a high market share with the current indications. We are expecting significant sales growth after the anticipated approval of first-line metastatic urothelial cancer indication. In the established markets, the number of launched countries has increased to 16 since the approval in April this year. Market penetration is exceeding our initial expectations. Reflecting the situation after the second quarter, we made an upward revision of our full year forecast. We are expecting further increase in the number of launched countries. Reimbursement is expected to start in Austria, Switzerland, Belgium and Nordic countries in the latter half of FY 2022. In Japan, market penetration is continuing to exceed expectations at a speed faster than our initial forecast. New patient starts are substantially above our expectations, and the duration of treatment in the clinical settings is actually confirmed to be longer than the clinical trials in many cases, which we think is contributing to sales expansion. Reflecting the market penetration much above our initial assumptions, we made a significant upward revision of our full year forecast. In the international markets, PADCEV was launched in Singapore in July this year. We are hoping for contribution to sales as we expect an increase in the number of launch countries in the future. The key to global growth in the future is the expansion in the current indications, as well as the additional indication in the first line settings. We are expecting full scale sales contribution starting from the United States. As for XOSPATA, due to the impact of a weak performance mainly in the United States and Japan, global sales were below expectations. In the United States, the largest market, we maintained a high market share and demand has been increasing, but the market growth was lower than expected. As a factor for the slowdown of the U.S. market, FLT3 screening rate is already high but has not reached our goal we set at the beginning of the fiscal year. New patient starts are below our expectations according to our analysis. In Japan, increased competitive pressure is serving as a factor for the weak performance. Reflecting these situations in the United States and Japan, we made a downward revision of our full year forecast. As for Evrenzo, sales in Japan and Europe are below expectations. Factors behind have not changed much from the previous quarter. Evrenzo has continued to be affected by competitive pressure in Japan and low penetration of differentiation from the existing standard of care in Europe. We are expecting launch and reimbursement in France, Italy and Spain in the latter half of this fiscal year. Factoring in the challenging situation after the second quarter, we made a substantial downward revision of our full year forecast. On page eight, I will explain cost items. COGS ratio increased by 0.8 percentage point year-on-year and was above initial forecast due to changes in product mix such as sales increase for Xtandi ex U.S. and Evenity in Japan. SG&A cost, excluding Xtandi U.S. co-promotion fees, increased by 9.5% year-on-year. When FX impact is excluded, SG&A expenses are decreased by 2.6% or JPY 5.1 billion year-on-year, under control in line with our initial forecast. Personnel costs fell by about JPY 6 billion with global optimization of commercial related personnel aligned with the transformation of product portfolio. We are also trying to reduce sales promotion costs related to mature products such as mirabegron, which decreased costs by about JPY 4 billion year-on-year. On the other hand, we are making active investment for new product launch readiness for PADCEV and fezolinetant. Sales promotion expenses rose by about JPY 4 billion year-on-year. We will continue to allocate our resources to strategic products with higher priority. R&D expenditure increased by 16.9% year-on-year, but by 4.2% when Forex impact was excluded. We booked one-time expenses of JPY 13.5 billion for using a priority review voucher in the first quarter for the application of fezolinetant. Excluding this cost, R&D expenditure decreased year-on-year. The progress against initial forecast excluding Forex impact was high at 52%, but the use of a priority review voucher was already factored in at the beginning of the current fiscal year, and this is in line with our initial forecast. Next, on page nine, I'd like to explain our revised FY 2022 full year forecast. First, we reviewed our Forex rate assumptions and decided to use 140 yen against the U.S. dollar and JPY 140 against the euro for the third quarter and beyond. In our revised forecast, revenue is expected to increase to JPY 1,529 billion, up by JPY 86 billion from the initial forecast announced in April. Forex impact is raising our revenue by JPY 115.5 billion. In reality, this is a downward revision by about JPY 30 billion. As I explained on page six, we expect Xtandi's challenging market conditions in the United States to continue in the third quarter and beyond. Sales forecast excluding Forex impact was revised downward. On the other hand, we made an upward revision for Europe and Japan with performance higher than our assumptions. SG&A costs as a whole are expected to reach JPY 642 billion, up by JPY 44 billion, mainly due to Forex impact. U.S. Xtandi co-promotion fees will decrease, along with the downward revision of sales forecast in the United States, but will slightly increase on a Japanese yen basis due to Forex impact. R&D expenditure will increase to JPY 278 billion, up by JPY 24 billion. According to our forecast, we factored in a Forex impact, an increase in inventories related to commercial production of zolbetuximab for about JPY 6 billion. These factors could reduce the core operating profit, but partly due to positive Forex impact, we decided to keep JPY 290 billion in our revised forecast. The core operating profit margin is expected to fall by 1.1 percentage point from our initial forecast. This is mainly due to an increase in cost of sales ratio as well as a one-off factor, an increase in R&D expenses from an increase in inventories related to commercial production of zolbetuximab. Our full basis forecast remains unchanged as there is no particular event beyond our expectations. Page 10. Here's a description of our initiatives for sustainable growth. On page 11, we discuss the progress of key events expected in FY 2022 for XTANDI and our strategic products. Because the onset of events are happening later than originally anticipated, the expected timing of obtaining top line results from the EMBARK study has been moved to the fourth quarter. Accordingly, we expect filing in the following fiscal year or later. Regarding PADCEV, based on the positive efficacy results of the EV103 study, including Cohort K, we discussed with the FDA and submitted sBLA in October for an additional indication of first-line locally advanced or metastatic urothelial cancer who are cisplatin ineligible. In addition, we obtained positive results from a bridging study in China in pre-treated metastatic urothelial cancer. The application for fezolinetant was accepted for review in the U.S. in August, and the FDA has set the PDUFA target date February 22nd next year. The filing in Europe for fezolinetant was also accepted in September. Other updates include the Fast Track designation granted from the FDA for Xtandi for the treatment of M0 CSPC and zolbetuximab for the treatment of gastric and GEJ adenocarcinoma. We look forward to further accelerating the development of these compounds and the timing of the duration till the launch will be shortened. On page 12, I describe the key success factors and development progress for fezolinetant in the U.S. and Europe, where we have submitted filing. It is estimated that there are approximately 10 million patients with moderate to severe VMS who are eligible for fezolinetant in both the U.S. and Europe. In the case of Europe, it's about 13 million. In both markets, we believe it is important to raise awareness of VMS and to promote fezolinetant's non-hormonal properties. But there are differences in the market environment. Based on the market research conducted by ourselves, we recognize that in the U.S. it is relatively easy for patients to communicate their intention for prescribed drugs to their physicians, and therefore educating menopausal patients to seek treatment with non-hormonal agents is an important initiative. In Europe, on the other hand, the first important approach is to make sure that the patients recognize VMS as a treatable disease and actively go to their doctors for consultation. In terms of pricing and reimbursement, in the U.S. where pharmaceutical companies can have the right to set the price. It is important to create an environment in which patients have optimal access to new non-hormonal products through private insurance. Whereas in Europe, where governments are involved in setting prices, the key to success is to obtain a reimbursement at prices that reflect the product value in each country. In the progress in development relating to reimbursement in Europe, the patient enrollment in the phase III-B DAYLIGHT study was completed faster than planned. For the SKYLIGHT study, which was conducted for submission in the U.S. and Europe, and the late stage phase II STARLIGHT study being conducted in Japan, both were also completed enrollment earlier than planned, indicating that both, healthcare professionals and patients participating in these clinical trials are highly interested in non-hormonal treatment of VMS. On page 13, I would like to explain about the progress made in the Focus Area Approach. The progress during the quarter is shown in red. In immune oncology primary focus, ASP-2074 is scheduled to enter phase I trials in January and March for the bispecific immune cell engager. The details of the target molecule are not disclosed at this time, but will be disclosed at an appropriate time in the future. This is the second project to enter clinical trials in the Focus Area Approach using the bispecific antibody, and we intend to continue to create subsequent projects based on the concept of the Focus Area Approach. In cell therapy program, the screening of ASP7317 clinical study was restarted in August. In ASP0367, our mitochondrial primary focus, additional screening activity was discontinued in the phase I-B study in DMD. The reason for this decision was not that safety issues were observed, but that it was more difficult than expected to enroll patients in the study and to obtain sufficient data for analysis, even if the study continued as it is. We will consider the future development strategy in DMD after analyzing the available data. We are going to let you know about the things will happen afterwards. ASP7317 received orphan drug designation from the FDA for the treatment of sickle cell disease in September. In addition, we have selected targeted protein degradation, which had been a primary focus candidate. As our fifth primary focus, the details will be explained in the following slides of page 14 or afterwards. Targets that are difficult to approach with ordinary compounds are called as undruggable targets. In this primary focus, we approach undruggable targets by utilizing the ubiquitin-proteasome system and intrinsic proteolytic mechanism as an approach. As you see on the right picture, the new modality consisting of three moieties, one that binds to the target protein and one that induces degradation and a linker that bridges them together, was created to establish a series of technology platform. We believe now we can continuously generate promising assets from the technology platform, and we will proactively invest the resources to the primary focus to continuously create programs in oncology and extend it into non-oncology field as our primary focus. Next, I talk about the advantages of this technology. The first characteristic is that it can be applied for wider targets. It has a stronger binding to the target for the direct inhibition. That is not what this mechanism has. It is serving as the catalyst to promote the degradation of the target. Therefore, it does not require high binding affinity like conventional modalities and is expected to be effective against target proteins that do not have a structure suitable for compound binding, such as shallow pockets. Second, because of its physical properties as a low molecular weight, it can be administered systemically, including orally, and conventional established methods and a knowledge can be applied to its manufacturing process and regulatory compliance matters. Next, I will explain the applicability and expandability of this technology. On the right picture, the left part of the figure binds to the target protein, and by replacing this part, the technology can be applied to a wide variety of targets. The right side binds to E3 ligase and is involved in the inducing degradation. By modifying this site or the structure of the linker, we can aim to enhance the efficacy and tissue specificity of degradation. We believe that this new modality could be an innovative therapeutic tool, and we aim to create a program continuously to address previously undruggable target proteins by converting targets or further improving function. Page 15. Here I will explain the details of ASP3082, the lead program for targeted protein degradation as a supplement to the previous financial results presentation. As shown in the figure on the right, ASP3082 has the mechanism to bring the target protein KRAS G12D mutant and E3 ligase into close proximity, and the E3 ligase ubiquitinates the KRAS G12D mutant. The ubiquitination of the KRAS G12D mutant makes it more easily recognized by proteasomes, which are enzymes that selectively degrade proteins, and the proteasome degrades the KRAS G12D mutant. Thus by degrading KRAS, a major effect in cancer cell proliferation, it is expected to have an inhibitory effect on cancer cells. The KRAS mutation, the target of ASP3082, is widely known to be involved in cancer development, but because of the lack of suitable pockets and sites for compound binding, it is regarded as an undruggable target, making it difficult to develop inhibitors. Among the many mutations, the G12D mutations occurs most frequently and occurs reportedly in more than 51,000 new cancer cases per year in the United States. A small molecule inhibitor for the G12C mutant, another type of mutation, is already on the market. G12C mutation has highly reactive sites called cysteine residues, and with a tight binding to this site, it is believed to inhibit KRAS function. On the other hand, in the case of KRAS G12D mutant, which does not have such a site, it is believed to be difficult to create compounds that bind tightly here. ASP3082 is expected to be an innovative therapeutic approach to inhibit the function of KRAS G12D mutants as a protein degrader. In order to further deepen your understanding of this primary focus, we are planning to hold an R&D meeting on December ninth, where our representative will provide a comprehensive explanation. We look forward to your participation. Page sixteen. I would like to explain strategic investment with Taysha announced the other day. Under the terms of the agreement, Astellas will invest a total of $50 million to acquire 15% of the outstanding common stock of Taysha, one board observer seat on Taysha's board of directors, an exclusive option to obtain exclusive license for two of Taysha's programs, as well as certain rights related to any potential change of control of Taysha. Taysha possesses multiple gene therapy programs in CNS. It uses AAV9, a clinically proven vector, and intrathecal administration is adopted as the route of administration to improve the balance between efficacy and systemic exposure. This investment gives us the potential to expand our pipeline in CNS genetic diseases in addition to our existing muscle-related diseases. In addition, Astellas' new manufacturing facility in Sanford, North Carolina, is capable of manufacturing AAV9. This Astellas manufacturing technology is a major factor led us to this mutually complementary partnership with Taysha's promising pipeline. On the right side of the slide, I will describe the two programs that are the subject of this exclusive licenses. TSHA-102 targets Rett syndrome, which is a severe genetic neurodevelopmental disorder happening mostly in females and it replaces mutated MECP2 gene. Currently it is on the stage of phase I/II clinical trials with a preliminary clinical data from adult study expected in the first half of 2023. The timing for exercising the option will be after receipt of the preliminary clinical data from the pediatric study, which will be initiated following the report of preliminary adult data. TSHA-120 targets GAN or giant axonal neuropathy, which is an ultra-rare progressive neurodegenerative disease, and it is designed to replace the mutated giant axonal gene. Currently, phase II trials have been completed and positive data have been obtained in terms of motor function improvement and safety. A Type B meeting with the FDA based on this study will be held in December of this year, and the minutes of the meeting are scheduled to be received in January 2023, based on which we will consider exercising our option rights. We will continue to actively consider partnering by leveraging our capabilities to accelerate the development of gene therapy and expand the pipeline. Page 17. This summarizes the progress made in the first half of the current fiscal year toward achieving CSP 2021. In the table above, sales in the U.S. are below full year forecast or initial forecast, but were offset by strong sales in Europe and Japan, and progress was in line with the initial forecast. PADCEV showed better than expected growth globally, and sBLA was submitted for the first line metastatic urothelial cancer, an important growth driver for us. For fezolinetant, we achieved an important milestone with acceptance of regulatory submissions in the U.S. and Europe. In the Focus Area Approach left bottom, in addition to the development of individual projects, activities to further expand the pipeline, such as the launch of new primary focus and strategic investment, progressed. In terms of core OP, right upper, we continue to thoroughly review costs while securing proactive investments for new product launches. SG&A expenses, excluding the impact of exchange rate fluctuations, decreased year-on-year. In the Rx+ program, which was not discussed today, we have initiated a phase II study of ASP5354 for lymph node mapping prior to cancer resection surgery, with the aim of expanding the indication. In terms of sustainability, we have released the integrated report 2022. The report presents in an easy-to-understand manner our medium- to long-term goals, or the way we would like to be, as well as our initiatives and progress for the goals. If you have not yet re-read that report, please take a look at it and feel free to contact our IR group with your comments and requests so that we can make improvements in the coming fiscal year and beyond. Page 18. This is the last slide for today. Here's the schedule of our upcoming events. The R&D meeting will be held on December 9th, as has been mentioned. Sustainability meeting will be held on February 17th. I hope you will join us. That is all I have to say here today. Thank you so much for your attention. That's all about our presentation. Next, we'd like to entertain your questions. You can ask questions only through Zoom webinar. You cannot ask questions through live streaming. If you have a question, at the bottom of the Zoom screen, there is a raise hand button, so please press it. If you're joining from the smartphone, if you tap the details, a raise hand will be shown, so please press that button. The MC will name you, so please unmute yourself on your Zoom screen and please mention your name and affiliation, and then ask questions, please. Thank you for waiting. First, Citigroup Global Markets Japan Inc., Mr. Yamaguchi, please. Mr. Yamaguchi from Citigroup Global Markets Japan Inc., you may be on mute. So please unmute yourself. Can you hear me now? Yes, we can now hear you. Sorry. Yamaguchi speaking. Thank you. Can you hear me now? Yes. I have two brief questions. First, the foreign exchange rate changes. Q1 results on last year's figures have not been changed. In the second quarter, you are making a revision. No changes in Q1, but you are eliminating impact of the Forex impact on Q1 and Q2, and you are eliminating all this impact in the second quarter all at once, correct? Kikuoka would like to respond. If you look at page 21 in the presentation material, as I showed here, with an auditing firm, CPA, we discussed, this does not constitute a change in the accounting policy. As you said, we didn't restate our historical statements. Not really all at once, but in the second quarter, in the account settlement for April to September period, we decided to introduce the system. The first quarter numbers have not been changed. This, what is the meaning of this table? In 2021 fiscal year, where we can go back if we want, but the impact was not so big in some years. If we were to follow this method from the first quarter of last fiscal year, what would be the core operating profit? The red portions are explaining that question. What is the difference compared to the numbers announced already? That's shown on this page. As you see here, in the second quarter in the current fiscal year, from the six months account settlement, if you deduct the first quarter from the April-September period, that is the figure. Up to the first quarter, the yen continue to depreciate. So JPY 4.5 billion for the fourth quarter. As we said before, JPY 2.8 billion as we announced. JPY 2.8 billion figure is included in the first quarter. Because we are deducting that figure, the second quarter is ±0. JPY 77.3 billion - JPY 2.8 billion. That figure is the appropriate number. Sorry. Rather than JPY 77.3 billion, the higher figure. By deducting the figure for the first quarter, if you look at the second quarter figure just appropriately, JPY 77.3 billion is the correct figure for the second quarter. Do you have a clear understanding? Yes. Next question, Farza Leonitant. Today, you introduced as key success factors country-wise, the situation was well understood. As in community, while the level of the success in the United States, that is going to be one important key factor to consider the success of this product. Next fiscal year, while the approval is going to be this February, and after that you are ready to go. Next fiscal term should be asked in the next fiscal term, but sales-wise, this will contribute. Well, you will make an investment, but the sales will be increased. I think that's your forecast for the preparation. Is this understanding right? Also considering the Western countries, I just wonder if the penetration rate will be higher in the United States compared to Europe. Thank you for the question. At around the end of the fiscal year, the detailed number is planned to be explained. Still, it's under the review, therefore the pricing forecast, that is something we rather refrain ourselves from explaining. The target in the United States next year is about the mid of three digits. Hundreds of millions. Therefore, I would like to rather refrain talking about the further details. Is the three-digit billion yen of the middle around JPY 500 billion? That's between JPY 100 billion-JPY 1,000 billion, right? Yes, that's right. Thank you. Thank you very much. Thank you very much. Next, Mr. Kotani from Nomura Securities. Please. Kotani from Nomura Securities, can you hear me? Yes. I have three questions. First, a very simple question. Continuing Xtandi patient assistance program and the Zytiga generics product, our leader is a competitor. In the third quarter, it's growing in the United States. It seems that competitive products are taking market share away from you. Is that correct? The diagnosis rate of prostate cancer is declining. Is that rising now? If nothing has changed, as is, according to our forecast, Xtandi in the United States may not grow so much. There's another study in which it will be coming to an end, but other than that, it may not grow as is. We don't have Matsui today, so Yasukawa, would you like to respond? Zytiga? We are behind Zytiga in terms of the market share because of the rapid inflation and economic slowdown or recession. Not all patients are economically rich. Cheaper Zytiga generics may be the drugs they want. Some patients or more patients are using PAP according to assumptions. This tendency will continue. Given the current economic conditions, this tendency is expected to continue in our view. On the other hand, competition against the new products, we are not behind according to analysis. Patients who are newly diagnosed, we are looking at various statistics. It's slightly increasing as a trend, but it's not returned to pre-COVID-19 levels yet. That's our understanding based on the statistics. COVID-19 is coming to an end, and now there is almost no impact of the pandemic. In the past, 2.5 years, patients who were under-diagnosed. Risk factors overlap between COVID-19 and prostate cancer. We cannot calculate the numbers. Some patients unfortunately might have passed away by now. Those who are still alive, in the COVID-19, it does not mean that they would not develop prostate cancer. Because of the under-diagnosis, they would progress and they would come back to the market. Regarding this return of the patients, how salespeople will approach these patients to gain the business, that's going to be the key. As I said during the presentation, already in the United States, close to 10 years have passed since the launch in the United States. Considering the situation in the U.S. society, untapped market does not remain much. For the past 2.5 years, there has been under-diagnosed patients, and that may be an untapped market for us. Thank you. The second question, this might be the difficult question, but this is extremely important. That is the impact of IRA. The catastrophic phase. The increase of the medical prices, I think, that is important. 2025 and afterwards, there is a cap of the price. Xtandi, I don't know, supposedly it costs about $100,000. Before and after IRA, the increase per patient becomes 1.727 times, and there is an increase of the payer. Also there is less PP necessity, no increase of price. The price also reduced paid by the patient. The step therapy and prior authorization that leads to unavailability of Xtandi. In order to prevent that, the rebate has to be increased. If so, for 2025, a greater level of the rebate is expected. Therefore, FY 2026, there might be the decrease of the revenue of Prograf and Harnal. All of these products are likely to be impacted with the IRA. With this perspective, how do you see the current situation? Yasukawa myself is going to answer this as well. Xtandi and Myrbetriq is likely to be the target of the price negotiation. That's what we think. Xtandi, in the fiscal, the first year or FY 2026, becomes the target of the price negotiation. Based upon the current rule, the price is possible to be reduced by around 35%. The procedure criteria is under development currently. In reality, how much it'll be, we cannot predict. This is just based upon our imagination. LOE is 2027, so we do not think there'll be the long-term impact. When our accurate calculation result becomes available, then I would like to let you know. Regarding mirabegron, when Part D redesigning is done, then the upper limit of the out-of-pocket payment per patient becomes $2,000 per year. Currently, those who are using the very expensive drugs and those with no cap for the out-of-pocket, there'll be a great reduction of the burden. In the case of the redesigning of Part D, then our payment exceeds more than $2,000, then payer payment is going to be increased. Therefore, payer might incur with the financial burden. Payer might have the strict control of the cost and prioritize generic. There are several factors. Mirabegron, we haven't done the accurate calculation yet as well. Medicare currently the sales prediction of mirabegron is 65% currently. What about this? Xtandi 25% and afterwards, you expect the growth concerning the catastrophic phase. The rebate has to be increased greatly. FY 2025 and afterwards, it is better that you would say there'll be no growth expected. Well, as has been explained, the new indication is going to be submitted, and if that is approved, then we have a room for the increase of the sales. Excluding that, then as has been mentioned, 2.5 years portion of our under-diagnosis. If even that is excluded in the United States, we don't see much of the untapped market remains. The growth room in the United States is quite limited. If the price is reduced there, it is definitely happening that the sales in the United States will be decreased even before the patent expiry. Next one. As you say, to a certain extent, penetration will be quite fast because globally, 10% of the patients are not indicated for hormonal therapy. There can be early penetration among those patients. If it's just 10%, it's just around JPY 200 billion. In the remaining 50% of the patients, they- We have to be careful about hormonal therapy, BMI 30 or over, higher or hyp ertension or dyslipidemia or diabetes. What do you think that the ramp up in these patients, are you expecting an increase in one step or two steps? You go into the initial patient population and then gradually it's going to expand. Is that the image you have? This is my last question. Today, Matsui is absent. I don't know of other details about marketing strategies. When Matsui is attending, we'd like to explain further details. Understood. Okay. Thank you very much. Next, Credit Suisse. Mr. Sakai, please. Credit Suisse Securities, Sakai speaking. First question. So the zolbetuximab commercial inventory production will be increased, therefore, you increase R&D costs for this as well. But what is the current status? That is what we have we are waiting long time for this matter, but if there's a focus, I would like to know your outlook. That's the first question. Second question, that is about the products. That's about fezolinetant. If you open advisory committee or not. That's what I want to know. The notification will be probably two months or three months before the actual date. But what kind of communication are you having with FDA or no communication? The first point, let me answer for the first question, and Taniguchi is going to talk about the second. The first question, that's about the zolbetuximab. As you know, the two phase three studies are ongoing. If you refer to slide 11, soon the result is going to be available. For example, fezolinetant twelve-month administration, four-weeks administration, that is not the case for zolbetuximab. This is event-driven study, so the accumulation of the event is the key. We cannot predict the pinpoint date of the top line result. That's why we have these bars from the late third quarter of this fiscal year to the mid of the next year, fourth quarter. Some point around this time, we believe that we can communicate you the result. That's the response to the first question. The second question, that is going to be answered by Taniguchi-san. Thank you. That is a question about the submission status of the fezolinetant in the US. With the U.S. FDA, day-to-day basis, we have the very close communication. The submitted data is very clear, so the data itself is, what we have a great confidence. Currently, U.S. FDA Advisory Committee is not expected to be held. Far, things are ongoing in a smooth manner, and after submission, the discussion is going without any problems. Thank you very much. Thank you. One more additional question. Taysha, your investment with Taysha, Audentes AT132 is still pending. Under these circumstances, AAV8 and Taysha has AAV9. There is some difference there in the use of different AAV, but in this area, your initiatives and your activities in this field. If one is going to be successful, are you going to have consecutive successes one after another? You may have such a way of thinking. How should we interpret this? AAV vectors are used for gene therapies. Your initiatives in gene therapies is very difficult and you are making additional investments into Taysha. There can be some associated risks you have considered by now. From where you have decided to make strategic investments in Taysha, including your experiences with Audentes, could you explain, please? Okay. Shitaka would like to respond first. It's the same AAV, but systemic administration into the blood and a local administration are different things. Ophthalmology and Taysha is using a local administration, intracerebral administration. It's not a systemic administration. Liver side effects would be a lower risk. In that sense, those in the clinical or stage, there are two programs for us and we are using systemic administrations. What's different from that is a local administration. Continuously, it's the same AAVs, but there is a slightly different risk philosophy in here. From that perspective, we decided to advance the, Kikuoka, would you like to add? As you know, biotech shares, of course, we took that into account because of the situation of biotech shares, and we decided to secure the rights to these two programs. We would like to minimize the risks in doing this in our investment, so please take that into consideration as well. In principle, in being opportunistic, we'd like to leverage these opportunities flexibly, and that's why we are doing this. For a listed company, investment in a listed company to secure the development rights, in a unique way, we had this transaction. Understood. In the R&D meeting on the ninth of December, you're going to focus on gene therapies to present, correct? In the R&D meeting, we are going to discuss targeted protein degradation on the 9th of December. Thank you very much. Yes. Thank you. Morgan Stanley MUFG Securities, Shinichiro Muraoka, please. Good afternoon, Morgan Stanley. Muraoka is my name. Thank you. I haven't really read through the material, so my question might not be really pinpointed. The generics of Lexiscan. Lexiscan number, database, there is no change about their budget. Generic is already on the market or not? And also the precondition of this budgeting this time, what is it? And the budgeting up until last time, I think, that is in others. What about the designing this time? Would you please explain about that? First of all, let me explain. Let me explain about the history of litigation from this May. After that, Kikuoka is going to explain to you about the precondition of the budgeting. First of all, in May, the patent infringement litigation in the first instance, our appeal was not approved, so we lost the case. In June, the Court of Appeals for the Federal Circuit, or CAFC, to which we appealed the case. On top of that, to the district court, which made the first instance, we appealed for preliminary injunction, but that was rejected. On the other hand, for the district court in 2022, up until the 15th of October, the preliminary injunction order for the generic launch was given or granted. September 27th, CAFC issued a temporary stay that restrains them from launching the generics at risk temporarily to Hospira. October 28th, only recently, CAFC entered an order extending a temporary stay through December 6th, 2022. That's what's happened recently. Of course, the situation is still ongoing, but by December sixth there'll be no launch of the generics. The December seventh and afterwards, what would happen? Well, this company might launch a generics at risk. Hospira might launch the generics at risk. That's the current situation. Regarding the budget, let me explain about it. Kikuoka speaking. As has been mentioned, when we budget for this fiscal year, like you mentioned, we didn't change the forecast of the sales in the risk and opportunity. Within the overall sales or the revenue, we took this factor into consideration. Just like Yasukawa explained, our assumption in the beginnings, of course, the result of this litigation is something that we have to wait. Compared to what we expected in the very beginning, risk might be lessened to a certain extent. Compared to the past, the impact onto this fiscal year is smaller than the previous. I see. You reduced the portion that was partially included in the others. Is that right? Yes. That's about it. Understood. Thank you very much. One more question. This is fezolinetant. Sorry to ask a question again. Next fiscal year, you're expecting sales between JPY 10 billion-JPY 100 billion. Profit contribution by fezolinetant, and we don't think there's going to be contribution in the initial year. Can it contribute to profit in the second year or the third year and beyond? What should be the image we should have? Kikuoka would like to respond. As Yasukawa explained, as for the timing, it's difficult to communicate the details of the marketing strategy. As for the numerical image on the sales side, we are discussing right now. From that perspective, that is going to be the basis. From the first year, contribution to profit is in sight in developing the budget for the next fiscal year. Is it going to be work positively for the profit from the initial year? Is that within your scope or insight? Yes. Expenses in the next fiscal year, mirabegron costs are being reduced for legacy products, but at the same time, in the first year, it's going to contribute to profit positively, mirabegron and other products. These are legacy products and we will try to reduce the cost for those products. Per brand, we have P&L for each brand we're looking at. From that perspective, in the current fiscal year, the expenses compared to the expenses used for education activities, based on the expected launch, sales promotion costs will increase. With that, profit contribution by an individual product could be a possibility. We are discussing based on that. Understood. Sorry to ask again, but partnering is in sight. That's why you are thinking that it's, there's going to be a contribution from the initial year? No? No, that's not our ass umption. Okay. Understood. Thank you very much. That's all from me. Thank you. Next, Daiwa Securities. Mr. Hashiguchi, please. Hashiguchi speaking. Thank you very much. Fezolinetant, you have the forecast, and based upon that, next fiscal year R&D in total, what's your outlook? In these five years, CSP, R&D, SG&A is set as a flat. Absolute value is maintained in your plan. In the previous fiscal year, there's a bit of the increase, but this time excluding the foreign currency impact, you are trying to bring it back to the two fiscal years before level. You explain to us the forecast of the sales considering that for mid to long term, you can spend a lot of R&D, and still that is reasonable from a strategic perspectives. What do you think about the possibility of that inflate a little bit, tentatively? That's about next fiscal year, so we are still working on that currently. Basically, fezolinetant, considering that is going to be approved within this fiscal year, the big landmark like development is completed. Considering the allocation of the investment for the strategic products, so far we are not expecting that large amount of investment will be made as R&D. Hashiguchi-san, you are asking the SG&A or R&D? SG&A. Oh, so sorry. It's about SG&A. I misunderstood. As for SG&A, the strategic is similar with this fiscal year. Also for the products that you mentioned, as has been mentioned already, we are going to make a proactive investment. However, even that taken into consideration, the factors of the currency, that is something we have to consider based upon the initial assumption. We do not think that there will be the bigger impact out of that. November and afterwards, we are going to work harder for the budgeting for next fiscal year. We need to communicate with the sales team as well, so that we can have a discussion for another opportunity of the revenue. If we can grow in certain area, then we'll make a certain investment. Here, I cannot tell you any detailed number. Anyhow, there is no change about the policy of continuing the SG&A flattened level as now. Sorry, I misunderstood about R&D. I see. It's okay. For SG&A for five years, well, so far there was no change about the flattening it, right? That is the current policy. As has been explained repeatedly, we've done the proactive investment. Do we have to get the result out of that? Now what we can do is the selection and consideration. We concentrate investment so that we can be efficient. Thank you. That's all. Thank you very much. Next, Goldman Sachs Securities, Mr. Ueda, please. Ueda from Goldman Sachs Securities. Initially, I'd like to ask you about PADCEV. In the United States, if you look at the quarterly figures, the second quarter figures, look weak. As Dr. Yasukawa mentioned, because of the coverage already for the second round already, if there is any information about the inventory, could you explain? On the first-line data disclosure, on any assessment in the clinical settings, on any change in how they use the drug? In the United States, it's $105 million. Before we showed you a long-term diagram. First-line treatment and non-invasive will be boosters for the future. Then we'd have the second rocket to be launched. Recently, at academic societies, we are disclosing the data. What has been the reaction? Taniguchi-san, any information you may have? Thank you. As you know, at ESMO, EV103 study Cohort K was presented. There was a very good response. There, cisplatin ineligible or intolerant. You see a patient's ORR was 64.5%, which is very high response. So there are high expectations about this data. With this, we would use this data to file a submission first in the United States. We did file the submissions. In our discussions with doctors, there are higher expectations about this drug among the physicians. Understood. Thank you very much. Second question. It's about the fezolinetant and line extension, expansion of the indication. Bio is cohort flush is working for the expansion of the indication for cohort flush for the breast cancer patients. So Astellas as well, are you thinking about the expansion of the indication beyond the VMS or hot flash? NK3 receptor inhibitor. That's one thing, and fezolinetant and NK3 receptor inhibition. When you think about these two types of the inhibition, what would be the difference? The first question, Taniguchi-san, could you answer the first question? Thank you. The breast cancer indication is probably a question. Of course, we also have a knowledge about the development situation at other companies. We as well. Could you mute your microphone? Regarding the second question, what would be the difference when one thing is another, one thing different is tapped on? What kind of difference would happen? So far we don't have any data and information, so I would rather not answer. Understood. Thank you very much. That's all. The first question by Mr. Ueda. We don't have Matsui here, so I would like to add. First quarter and second quarter difference for PADCEV. First quarter, temporary clinical order sales for JPY 10 million was included in the first quarter. If you deduct this from the first quarter to the second quarter, you can see good growth. That's something I wanted to add on behalf of the IR team. Thank you very much. The JP Morgan- J.P. Morgan. Mr. Wakao, please. Thank you very much. First, Xtandi. Explain the details. Sorry to ask again. In the United States, those who are not diagnosed may contribute positively. On the other hand, if you look at the number of prescriptions, Zytiga generics are growing. Xtandi growth is slowing or becoming flat. Considering the situation, the NAF diagnosis may increase, but Xtandi may not necessarily benefit from that, as I felt. Could you elaborate on this? In the United States, you already explained the situation, but what about Europe? A similar thing must be included in your assumptions for Europe, like the US. Zytiga generics already launched in the European regions as well. What is the impact? That's my first question. Patients with under-diagnosis, we don't know. We cannot investigate the details of the economic conditions of the under-diagnosed patients. Patients who are not economically in good conditions may be diagnosed. When their disease is already progressing, it might be discovered at the time they may go to cheaper generics. There is such a possibility. Patients who would return may not necessarily receive the prescription for Xtandi. Still, we'd like to continue appropriate educational activities. For patients who would best fit for Xtandi prescription, we would like to deliver the prescription and the drug to them. That is appropriate activities. Underdiagnosis is continuing in the United States, and economic conditions right now would intensify the competition against generics right now. Similar signs, not only in Europe, but in other regions globally. In the quarterly meeting, I asked this question to salespeople at such a meeting. There are no clear signs according to their reply. For the time being, we don't have clear signs, but continuously we'd like to pay attention and watch it carefully. Thank you very much. Second, the last question about fezolinetant. The other day in the meeting, I got a very good understanding, and I understand status of the potential patients. ICER draft version is currently available, and if I refer to the regarding the safety with the long-term usage, there might be the risk of regarding safety, especially for those over 60 years old, the risk might go up. The risk just you explained is not covered by the ICER draft version. I feel a bit of the gap existing here. How do you view? Well, it's ICER, so that's about for the reduction of the cost. Therefore, their way of the description might be quite conservative. What's your opinion about this draft, ICER draft version? It's Ikeda speaking. Regarding ICER, well, that is, independent report by themselves, so we don't have any clear stance or position for their view. Sorry, I couldn't answer you some clear answer. I see. So So you do your own, analysis and, study. Right. So for the safety, we have a SKYLIGHT 4 result is available, with a comparison to placebo. The safety requested by the authority is, secure to a, certain extent or great extent. So that is our position. Thank you very much. That's all. Next, Jefferies Securities, Mr. Barker, please. You may be on mute. Please unmute yourself. Stephen Barker from Jefferies Securities. Thank you very much. Fezolinetant sales in the initial year is my question. As you said, JPY 10 billion, somewhere between JPY 10 billion-JPY 100 billion could be achieved, but could you be more specific regarding this number? Thank you for your question. What I mentioned earlier is three-digit, the middle of the three-digit oku yen. It's not like you can do away with JPY 10 billion or JPY 99 billion, but somewhere in the middle, in that range. Okay. Thank you very much. That's all from me. Thank you. From the media, we have received a question, Nikkei Biotech, Ms. Kubota, please. Can you hear me? Yes. Two questions about gene therapy that you touched upon at the very end. Any explanation? AAV, it can be also produced in your new production site in the US. So, Taysha, this production capability of GMP production of AAV is something looked for by the Taysha, and you have it. That's why you came to this investment or your production capacity might be also made use of through this investment as well. Thank you for the question. Taysha. Well, our GMP production sites in Sanford, that is where also the Taysha is having the great interest. That's why, that's one o f the reason why we were selected. The investigational product and also the production sites, those are what the Taysha does not have. Probably they are outsourcing for such process. However, for the commercial production, if the approach will be continued or they'll partner with us so that we ourselves can produce the products, I think that's what currently they are thinking. Thank you. I'll take it. One more question about this investment partnership. To control the overexpression of the transgene, they have the technology, a program. Is there any possibility of using this for your systemic administration programs of Astellas? You're talking about the TSHA-120 is using the miRARE platform to control the overexpression of the genes. MECP2 gene is half. You'd like to regain one. There are duplications of the gene in other diseases, it should not be two. There should be a feedback mechanism to make it always one. Such a mechanism is entailed. Similarly, if there is a need for a similar thing in the genetic diseases, a similar technology might be required. Thank you very much. That's all from me. Thank you. Thank you very much. Next will be the last question. Tokai Tokyo Research Center, Mr. Akahane, please. Can you hear me? I'm Akahane. Thank you very much. First question, that's about the business in China. Greater China sales. That is, progress smoothly, 36% increase, and there's an increase in the plan as well. The 80% is the Prograf that is contributing to this increase. As you know, in China, there's an issue of the COVID-19 and also their own program for the purchasing. There's the case that only the richer people can get the benefit of a treatment. Overall, how do you view the Chinese business? Thank you. Yasukawa is going to explain. First of all, and Kikuoka will make a supplement com ment if necessary. It's been more than 30 years since we've started business in China. For a longer time, Prograf and tamsulosin dependent business is what we've been doing there. Of course, relying on only these two products will not make us to further expansion, rather shrink. Especially tamsulosin, there is no future expansion. Prograf might survive for a certain period of time. That's one thing. Recently, in the mid-2010s and afterwards, the non-Japan or foreign companies for China, meaning us, and toward them they opened the door. That's a big change of their policy. Also their economy is enriched currently. Also iPhone and such communication measures. Although there is still certain restriction, but they can get the information about the treatment taking place in overseas. In Western countries and Japan, treatment available, that market is not available in the Chinese market. If that is learned by the national public, that's going to be the risk for the communist regime. In China, it's not approved, but as long as it is a superior product, they are going to grant approval immediately. That's what we've been looking at the China. Therefore, we enhanced the development group in China. XOSPATA, Xtandi. Well, Xtandi, we've been doing even before that, so it took time. But XOSPATA and afterwards, in the Western advanced countries, we are trying to shorten the interval so that we can launch the kind of products in Chinese market soon. XOSPATA, PADCEV as well. We have the bridging study for China that made a success. Zolbetuximab, that is for gastric cancer. Southeast Asian countries, the gastric cancer prevalence is really high, so we are aiming at the development even from the beginning in China. Prograf, Tamsulosin, such conventional drugs are going to be replaced, especially with the area of oncology. Thank you. I understand very well. Thank you. May I add? Regarding Prograf, you asked the question, so let me add. As you said, Greater China is growing a little less than JPY 6 billion. We have a Prograf in China. At the end of FY 2021, due to COVID-19, Shenyang factory was shut down. The market inventory was depleting. Because of the resumption, the shipment increased. There was some special factor behind. Please take that into consideration as well. Understood. My last question. Sorry to ask again, but fezolinetant. On page 12, in U.S. and Europe, the expression is slightly different in prescription to patients. Hot flash, there is ethnic difference. Also, whether to see this as a disease or not, there may be some cultural differences in the markets. My point is that in expanding this, there may be a lot of costs required for education activities. In China, it was not so successful, but should I see this for the future in China? Today, we don't have Matsui today. In Europe, how many patients are aware of this? We cannot give you a concrete explanation today, so we'd like to do this next time to explain by Matsui or from corporate communications. In China, as you know, China, Korea, and Taiwan, we had a study there, and endpoints set for the study were not met. In China, 30 milligram. We had a study up to 30 milligram in China. The 45 milligram is submitted in Europe and the United States only. Using the data from Western countries, we cannot file our submissions using that data only. According to that judgment, the team is now considering the next program. Once we have further discussions and are ready to announce the next plan, we'd like to explain the details to you. Understood. Thank you very much. Thank you very much. Time is up. With this, we'd like to close today's explanatory meeting here. Thank you very much for your attendance today. Thank you very much.