Thank you very much for your coming to this Astellas Q2 FY24 Financial Results. Astellas. I'm Hiromitsu Ikeda, Chief Communications and IR Officer, serving as a moderator for today. Today I make a presentation first that is followed by Q and A. That presentation is based upon the presentation material posted on our website for question and answer. As well, we are going to provide the simultaneous translation in English and Japanese. The accuracy of the translation is not guaranteed by Astellas. Please do understand about that. The language can be selected from the menu over Zoom webinar screen. If you select the original, then you can hear original voices without voices going through the translation. Cautionary Statement: This material or representation by representatives for the company and our answers and statements by them for the company in the Q and A session includes forward-looking statements based on assumptions and beliefs in light of the information currently available to management and subject to significant risks and uncertainties. Actual financial results may differ materially depending on a number of factors. They contain information pharmaceuticals including compounds under development, but this information is not intended to make any representations or advertisements regarding the efficacy or effectiveness. Now let me introduce you the participants here today. The Representative Director, President and CEO Naoki Okamura, Chief Scientific Officer Yoshitsugu Shitaka, Chief Medical Officer Tadaaki Taniguchi, Chief Financial Officer Atsushi Kitamura. Chief Commercial Officer Claus Zieler, we have five representatives here from Astellas. Now I'll start the presentation. Okamura-san? Hello everyone. I'm Naoki Okamura from Astellas Pharma Inc. Thank you very much for joining our FY2024 second quarter year to date Financial Results Announcement Meeting out of a very busy schedule today. This is a cautionary statement regarding forward-looking information as this was explained by Ikeda earlier. I'm not going to read this page. Page three is the agenda for today. Starting from the next page, I will explain these topics in this order. On page four I will give you an overview of FY2024 second quarter year to date financial results. Revenue increased by 22% year on year. Sales of strategic brands as a whole expanded to over JPY 150 billion in total, exceeding expectations with a significant growth of over JPY 90 billion year on year. As for SG&A expenses excluding U.S. co- promotion fees, ratio to revenue improved by 3.2 percentage points year on year through continued cost management with a focus on ROI, core operating profits significantly increased year on year mainly driven by growth of Xtandi and strategic products and continued cost management. Full year forecast of revenue and core operating profit was revised upward based on the robust second quarter year to date progress. As a result, we shifted from profit decline initial forecast to profit increase forecast. I've explained the details of our revised forecast on page 10. On page 5 I will explain FY 2024 second quarter year to date financial results. Revenue reached JPY 935.6 billion, up by 22% year on year. Core operating profit rose to JPY 183.1 billion, up by 36.2% year on year. The bottom half of this page shows a full basis results. In the right bottom of the table, we included other expenses booked in the second quarter. We booked net foreign exchange losses of JPY 12.2 billion associated with forex rate fluctuations. As a result, operating profit increased to JPY 93.7 billion, up by 69.9% year on year. Profit increased to JPY 73.5 billion, up by 105.3% year on year. On page 6, I will explain FY 2024 second quarter year to date results of Xtandi and strategic brands as well as a revised full year forecast. First, about Xtandi, global sales increased to JPY 451.7 billion, up by JPY 90.7 billion or 25% year on year. Xtandi progress continues to be strong globally, driven primarily by the United States from the first quarter. In the United States, in addition to the growth of the overall market, the penetration of M0CSPC indication and its ripple effects on other indications have continued to contribute to higher than expected sales growth in ex-U.S. regions. Demand was as expected or exceeded expectations. We have updated our forecast based on the progress by now. In line with our initial guidance, we are anticipating three months negative impact from U.S. IRA Medicare Part D redesign in the fourth quarter. In the United States. Initially we were anticipating the impact of $50-$70 million, but along with the revision of our forecast, we have updated the impact to $80-$100 million. Robust progress through the second quarter globally as a whole is expected to more than offset the negative impact from U.S. IRA Medicare Part D redesign. So we have made an upward revision of our global full year forecast to JPY 859.7 billion. Sales of strategic brands supporting a future growth namely PADCEV, IZERVAY, VEOZAH, VYLOY and XOSPATA expanded to over JPY 150 billion in total with a robust growth of additional JPY 90 billion or more year on year. We have made an upward revision of a full year forecast by more than JPY 40 billion in total, reflecting strong momentum overall. As a result, we are expecting growth to about JPY 340 billion in FY 2024. PADCEV global sales increased to JPY 75.4 billion, up by JPY 42.7 billion, expanding substantially with a growth of 131%. IZERVAY sales expanded to JPY 28.1 billion, substantially exceeding initial expectations. Reflecting the respective robust progress, we revised the full year forecast upward. I've explained the details later. Slides. Global sales of VEOZAH reached JPY 14.8 billion, making a steady growth since the first quarter. We have continued to implement initiatives with a focus on ROI. The number of launched countries has increased to 18. Regional expansion has also contributed to sales growth, reflecting the solid demand trend globally as a whole. We have made an upward revision of our full-year forecast. As for VEOZAH in Japan or VEOZAH globally, sales for about four months since its launch in Japan in June reached JPY 1.2 billion. This progress exceeded our initial expectations faster than expected. Market penetration of clinician education has contributed greatly. Steady progress is being made towards regional expansion as well. VYLOY was approved in Europe in September and in the United States in October. It was launched in the United States last week. It will be launched from the third quarter onwards in the respective countries in Europe. In China, we are expecting approval in the fourth quarter. Reflecting the strong performance in Japan, we made an upward revision of a full year forecast. We are expecting further sales growth along with regional expansion from now on. So XOSPATA performed well globally as a whole. Global sales increased to JPY 34.8 billion, up by 32% year on year. Increase in FLT3 testing, especially in the United States, has contributed to demand increase, driving the overall sales. Reflecting the solid progress through the second quarter, we made an upward revision of our full year forecast. We are expecting continuous stable growth going forward as well. On page seven I will explain a business update for PADCEV. Global sales of PADCEV grew more than twofold year on year, progressing well vis-à-vis our initial assumptions. The number of launch countries has increased to 39, out of which 11 countries have the approval of first line metastatic urothelial cancer indication. Based on the robust growth trend globally as a whole, we have revised our full year forecast upward. We are assuming different growth rates in different regions, but we are expecting continuous strong growth globally as a whole. Let me also explain the progress by region. First in the United States, first line indication based on EV-302 study has penetrated rapidly in the market since approval in December last year, with new patients share approaching 55%. Due to already high penetration rate, we are expecting a more moderate growth going forward. We are not expecting growth to stop but rather we are anticipating the mild but stable growth in Europe. Prescription is rising in the second line settings and beyond where we are obtaining reimbursement. The additional first line indication approved in August has also contributed to sales growth. For the penetration of the first line indication it is necessary to go through procedures to obtain reimbursement once again, so we are expecting full-fledged sales growth from FY 2025 onwards. In Japan the additional first line indication was approved in September. We are expecting PADCEV to serve as a growth driver from the third quarter onwards. In China the indication in the second line setting and beyond was approved in August. We are expecting future contribution to sales. Furthermore, the additional first line indication is expected in the first half of calendar year 2025. We can expect further acceleration of sales after approval. In the international markets. The additional first line indication was approved in multiple countries such as Korea and UAE contributing to sales growth. We are expecting further new launches and first line approvals from the third quarter onwards. Lastly on this page let me also touch on future growth drivers. We are expecting substantial first line mUC sales contribution from ex U.S. regions on a full scale in FY2025. Furthermore, next potential growth driver is the anticipated additional indication of MIBC muscle invasive bladder cancer with top line results expected in FY 2025 and sales contribution expected after approval. On page 8 I will explain business update for IZERVAY in the United States. IZERVAY has continued to perform well since the first quarter. Sales in U.S. dollars reached $184 million growing steadily by 26% quarter on quarter. Market share has risen from about 35% in the first quarter to about 40% in the second quarter. Also new patient share is estimated at about 60% in the second quarter with a steady increase in the number of new patients. Given the fact that the competitor's product was launched about six months earlier, we think we are making great achievements. Over 143,000 vials have been shipped since launch. Adoption at new accounts is also making steady progress. As of the end of September IZERVAY was available in over 1,300 retina accounts. Post-marketing safety profile remains consistent with clinical trial results without new safety signals observed. We believe physicians' high assessment of IZERVAY's safety profile is also contributing to its robust progress. In addition, from 30th September new DTC campaign was launched across major channels including TV and social media. We are aiming to raise disease awareness of GA geographic atrophy and highlight the importance of early treatment with IZERVAY. Only one month has passed since the start of the campaign, but we are already receiving positive feedback from retina specialists and patients. As a future outlook, we are anticipating the overall market expansion due to DTC campaign from the third quarter onwards. Based on the progress exceeding expectations through the second quarter, we have raised our target market share at the end of FY 2024 from the initial 40% to 50%. Based on the good performance so far and the latest outlook, we have revised our full year forecast substantially upward. Very good performance has continued since launching September last year in the United States. We're expecting further growth. On page nine, I will explain SG&A and R&D expenses excluding US Xtandi core promotional fees. SG&A expenses increased by 10.2% year on year when forex impact was excluded. SG&A expenses increased by 3.8% year on year as a main factor behind sales promotion costs increased for strategic brands and IZERVAY in particular by about JPY 19 billion year on year during the same period last year. IZERVAY was in a stage before full-scale investments, so this is a factor to increase our costs. On the other hand, sales promotion costs related to mature products decreased by about JPY 6 billion year on year. Also, due to the global organizational restructuring implemented in FY2023 including the reorganization of Japan, commercial cost fell by about JPY 5 billion year on year. As a result, SG&A ratio to revenue improved by 3.2 percentage points year on year through continued cost management with a focus on ROI and the expansion of strategic brands. The expenditure rose by 21.4% year on year and by 15.4% when forex impact was excluded. As main factors behind, we have made investments in order to make progress in clinical trials for primary focus, immuno-oncology and targeted protein degradation and enhance in-house capabilities necessary for clinical development resulting in an increase by about JPY 13 billion year on year. One-time co-development cost payment booked in the first quarter is another factor to increase our R&D expenditure. On page 10, I'll explain FY 2024 revised full-year forecast. First, we revised our full-year forecast forex assumptions to JPY 149 against the U.S. dollar and JPY 160 against the euro. From the third quarter onwards, we are assuming forex rates of JPY 145 against the dollar and JPY 155 against the euro. We have made an upward revision of revenue forecast by JPY 150 billion to expect JPY 1.8 trillion. We have factored in an increase of about JPY 30 billion due to forex impact and an increase of about JPY 120 billion. For XTANDI and strategic brands, we are expecting JPY 823 billion SG&A expenses. As a whole, we have factored in about JPY 15 billion due to forex impact, about JPY 40 billion as US Xtandi core promotion fees with an upward revision for Xtandi in the United States and an increase in pharma fee to be paid to the government in accordance with sales amount in the United States which rose due to good performance. We are forecasting total expenditure to reach JPY 341 billion by factoring in an increase in development costs due to faster patient enrollment in the ongoing clinical studies for VYLOY and VEOZAH. In addition to forex impact. As a result, through sales growth for strategic brands exceeding expectations and stringent cost management, we are expecting core operating profit to reach JPY 300 billion changing from profit decline initial forecast to profit increased forecast. We are forecasting JPY 80 billion for full basis operating profits by factoring in other expenses booked up to the second quarter. We are also incorporating a certain amount in our forecast for other expenses in case of potential risks such as impairment loss. From here I will explain our initiatives for sustainable growth. Page 12 summarizes key updates on R and D since the last financial announcement. The details of the strategic brands and individual programs of the focus area approach will be explained in the following slides. Slide 33 in the Appendix provides an overview of the partnership of AviadoBio, which is one of the primary focus in genetic regulation. Please refer to it if you are interested. We made progress in DigiTiva, our digital health solution for heart failure management, has been certified by the FDA as software as a medical device. Preparations are currently underway for pilot sales in the United States. Regarding an implantable device from IOTA Biosciences, early feasibility study of a program targeting underactive bladder was approved by the FDA for an IDE investigational device exemption, which is the equivalent of an IND for pharmaceutical products. On page 13 I will explain the progress of key events expected in FY24 for XTANDI and Strategic brands. I have indicated in blue the progress that has been made since the previous financial results announcement. PADCEV was approved in China in August for the second line treatment of MUC based on the EV-203 study. In addition, an additional indication for first line treatment based on the EV-302 study was approved in Europe in August and in Japan in September. VYLOY was approved in Europe in September and in the U.S. in October for the treatment of gastric adenocarcinoma and GJ or gastroesophageal junction adenocarcinoma. As announced in the press release of the day before yesterday, we have withdrawn the marketing authorization application submitted to the EMA. Based on the results of discussions with the CHMP in EMA, we remain confident in the clinical profile of IZERVAY as we continue to believe that the clinically meaningful effect of IZERVAY in the slowing progression of geographic atrophic lesions demonstrated in the clinical trials outweighs the risk. While geographic atrophy is a serious condition that can lead to irreversible visual impairment and blindness, there are currently no approved treatments outside the United States. We will continue to evaluate available options to bring IZERVAY to patients around the world, including in Europe. In Europe, in addition to the process of centralized marketing authorization based on a single submission through the EMA, there are also multiple application processes that involve individual procedures for each member country. We will consult with the authorities in each European country to confirm what application processes are possible and consider what we can do. As we haven't started the consultation with authorities yet, we are unable to provide any specific information regarding the future direction or timeline at this point. We'll provide an update once the situation becomes clearer, so please wait for further information. I would also like to touch on the risk of impairment losses on ISV, which is of great interest to the investors. We have booked $1.1 billion in intangible assets outside the U.S. for IZERVAY. We will re-evaluate the asset value and perform appropriate accounting procedures. In revaluing the asset, we will need to consider factors such as the availability of the submission processes and our target countries in Europe, as well as the fact that sales are exceeding expectations in the U.S. The competitive environment is different from the assumptions made at the time of acquisition. In addition, the target region for this asset is outside the U.S. and the possibility of submissions in countries in regions outside in Europe that we are currently considering will also be reflecting the evaluation of the asset value today. I cannot give you any specific answer about whether or not there will be impairment losses or if there is the scale of the loss. But since we have already factored in other expenses such as the risk of impairment losses into our full year focus, we believe that even if an impairment loss were to occur this fiscal year, we would be able to absorb a certain amount of it. Slide 14, page 14. I will now explain the progress of the focus area approach. The programs that are in the clinical trial stage and have been updated since the previous fiscal announcements are results indicated in blue. Primary focus in immuno is ASP1570. Initial data including phase 1 data was presented as a poster at the ESMO in September. ASP3082 integrated protein degradation was presented orally at ESMO as well on initial data from the phase 1 trial. We introduced the details of the data at the briefing session held on September 27, so please see the materials from the link if you are interested. ASP2016 in genetic regulation received rare pediatric disease designation and orphan drug designation from FDA in August 2024 and September 2024 respectively. ASP5502 in immunohemostasis and primary focus candidate achieved the first subject, first treatment and phase 1 trial since September. Please refer to Appendix lines 31 and 32 for an overview of each primary focus flagship program marked with an asterisk. As I have explained so far, the overall business has been steadily progressing through the second quarter. I will now explain the mid-term initiatives that are supporting this favorable progress as well as the latest outlook based on these initiatives and situations. On page 16, I will first explain the overview of mid-term initiatives. In the second quarter, we were able to show good progress including significant growth of strategic brands, the acquisition of encouraging initial data from ASP3082, and an improvement in the SG&A ratio to revenue, which led to an upward revision of the full-year forecast for revenue growth prospects. In order to ensure successful implementation of the CSP21, we have established three enterprise priorities that are closely linked to our performance targets, and we have begun to work on these in a full-fledged manner from this fiscal year as an overview of each is shown on the right side of the slide. First, growth of strategic brands is essential for expanding future revenue and the growth strategy is an initiative to maximize their potential. Next, the bold ambition is an initiative to accelerate R and D for lifecycle management of strategic brands and the focus area approach in order to improve pipeline and sustainable margin transformation is an initiative to pursue cost optimization in order to achieve our target of an operating margin of 30%. We have set KPIs for each initiative and are steadily implementing them as a priority issue while rigorously monitoring progress based on the results. Through the second quarter, we are seeing positive results from these initiatives. In the following slides I will explain the initiatives and the latest outlook for each of three enterprise priorities on page 17. First, I will explain the initiatives to maximize the potential of strategic brands which are extremely important to expanding future revenue. The total sales of our strategic brands through the second quarter have grown to over JPY 150 billion, achieving growth that exceeds our initial forecast at the beginning of the fiscal year. We expected sales to grow to JPY 300 billion for the full year, but based on the strong progress and the latest forecast, we believe we can aim for JPY 340 billion. In order to further accelerate growth, we are introducing a new operating model by brand level. We have already started introducing this in the U.S. from July and it is already showing results in accelerating sales growth in the U.S. market. By shifting from a hierarchical organization to a cross functional organization by products and the commercial organization senior management work with each product team, we are now able to promote our faster decision making. We will continue to expand this model in regions outside the United States in order to accelerate the growth of strategic brands. We are also focusing on life cycle management initiatives. We are accelerating the progress of clinical trials for expanding indications and we expect this to contribute to an additional sales growth on top of the existing indications. We expect to receive top line results for VYLOY in pancreatic adenocarcinoma this fiscal year, PADCEV MRBC in FY25 and XOSPATA treatment naive AML in FY26. In addition, LCM initiatives that are expected to achieve milestones in FY26 and beyond are shown on slide 30 of the appendix. Our key strategic brands are making steady progress in achieving about JPY 500 billion in sales in FY25 and we expect further growth from 26 onwards. We will maximize their potential through our new operating model and are looking forward to their potential sales contributions of LCM. On page 18 I will explain our outlook for the focus area approach at the announcement of our FY23 financial results. In April, we announced that we plan to advance four flagship programs in each of our primary focus areas, namely ASP3082 for targeted protein degradation, ASP2138 for immuno oncology, AT84 5 for genetic regulation and ASP7317 for blindness and regeneration to the POC judgment stage by the end of FY25. In order to accelerate POC judgment, we are working to build an agile organization structure and strengthen our in-house capabilities in early development. The chart in the middle of the slide shows the expected timing of the POC judgment for each program. We expect to have the POC judgment timing in the first half of the calendar year 2025 for SB382, in the first half of the fiscal year 2025 for ASP2138, and in the second half of fiscal year 2025 for AT845 and SB7317. To date, the focus area approach has been in a phase of divergence as we have explored the potential of each platform in the future. Depending on the results of the POC judgment, the current primary focus will move to a phase of convergence, and we will strive to improve the value of the pipeline by investing management resources preferentially in primary focus that have achieved clinical POC. The R&D portfolio will be constantly reviewed and prioritized based on the technical difficulty and value of the programs and will be turned over repeatedly. We expect that the programs created through the focus area approach will progress and contribute sales in the 2030s bringing about sustainable growth. On page 19, I will explain sustainable margin transformation. As I have explained so far, our strategic brands have entered a growth phase that will contribute significantly to sales expansion. We can also see expansion from fiscal 2025 and onwards and we are becoming more confident that they will grow to a scale that will make up for the decline in sales due to the loss of exclusivity for Xtandi and R&D. We have entered that stage of POC judgment for the four flagship programs in our primary focus. Depending on future developments, we will invest management resources in priority areas to drive growth in the 2020s and 30s to support the growth and investment and ensure sustainable growth. After the loss of exclusivity for XTANDI, it will be important to work on optimizing our cost structure. Since Kitamura took up his new position as CFO, we have been working to control costs in a disciplined manner, but at this point we will review our efforts and optimize the goals to achieve over the next four years, which is between JPY 120 billion and JPY 150 billion. I am going to explain that with this slide on the left side of the slide, we have divided the specific measures for cost optimization into four categories. The progress of these measures is being monitored strictly under the steering and management system to enhance the effectiveness of each measure. In addition, many of the measures have already completed the planning phase and have moved to the implementation phase. For example, in clinical development operations will enhance our in-house capabilities for early development while minimizing outsourcing. In addition, in order to further consolidate and streamline global operations, we are considering establishing a Global Capability Center with the aim of building a flexible resource provision system for the entire value chain and all functions that support it as needed. We are also working to improve manufacturing costs through manufacturing scale-up and yield improvement through our review of manufacturing process. We will continue to implement these measures from FY24 to FY27. As a result, we aim to achieve cost optimization of JPY 120 billion-JPY 150 billion on a company-wide level by the end of fiscal 2027. As an expected annual effect of this, an annual equivalent of JPY 40 billion is expected to reach by the end of this fiscal year. The resources generated from here will be used for growth investment such as further sales, promotion of strategic brands, lifecycle management initiatives and late stage development of prioritized primary focus products after POC, and we will continue our effort to secure mid term profits by increasing profitability. Page 20. This slide summarizes the initiatives we'll focus on in the midterm as explained so far. We'll commit to these initiatives which include maximizing the potential of strategic brands, focusing on prioritized primary focus products and increasing the pipeline value, as well as pursuing cost optimization to improve profitability and aim for further growth after extended loss of exclusivity. This concludes my presentation. Thank you for your attention. Thank you very much. That's all. As our explanation, we now would like to entertain questions from the audience. If you have a question, please press the Raise hand button at the bottom of your Zoom screen. If you're joining from your smartphone. If you tap details, raise hand button will be displayed, so please press it. The MC is going to name you one by one. If your name is called, please unmute yourself on your screen and please mention your name and affiliation and ask questions. So questions please. Thank you for waiting. The first Mr. Yamaguchi from Citigroup Securities please. Yamaguchi speaking from Citigroup Securities. Can you hear me? Yes. Thank you very much. My first question as you explained, isfa. This may be a question I think you can respond rather than questions you cannot respond. There would be a PDUFA date for label update is a Vyloy update for sales in the United States. Any impact? There would be EDDC and syrup. What about the impact of label update? Is that included or not? If that's the case, can I understand that the impact is going to be positive? That's my first question. Stamila would like to respond. Thank you for your question. Kitamura speaking regarding the label update impact that was included in the initial plan. So that continues to be part of the plan. That's my response to a question, understood, and also this is my second question. In Europe you may not be able to talk about the progress, but in Europe there can be an individualized procedure to file in the respective countries. In Europe. I'm not asking about specific countries, but in which country that procedure can be applied in ex US regions, Europe is one of them. For example, in Japan, Asia, China. Do you plan to have a development program in those countries and regions? First, I'd like to respond briefly if there's anything missing. Taniguchi would like to add. Originally in Europe through CHMP for the region across Europe. Before that procedure, each country had a filing and that filing in each country still remains, but it takes time and efforts to do this in each country. Clinical studies may also change, so usually through CHMP to get the approval for all Europe through EMA. After Brexit, U.K. is no longer part of Europe and Switzerland, which is not a member of EC, has its own filing system, so that is possible in each country. But instead of sending and submitting our documents to the respective countries, but based on the data package, we consult with the regulatory authorities and if they say they can review it or you'd like to file, that is going to be the process which will be in operation. So a few countries first with the regulatory authorities. We will use our current data set to consult with them to see whether we can file a submission or not. That is going to be the first step. And. Outside of EMA, U.S., Switzerland, we are filing in those countries. Also in Japan we are consulting with PMDA. We started the consultation process in other Asian countries and South American countries. As much as possible, we'd like to deliver IZERVAY to patients. We will continue to make efforts and with anything missing. Thank you very much. I don't need to add, but as Kitamura explained, in Europe there's going to be a review by the individual countries which we are considering. Regarding other countries, U.S. U.K. filing is being submitted. Canada, Japan, China and other countries. We are considering the possibility in those countries as well, and once we have the discussions with regulatory authorities in their respective country, we'd like to update you. Lastly, just briefly regarding VEOZAH, you had an upward revision. The function test frequency is higher and in the Q1 earnings call we discussed the potential impact. Any feedback from the sales field? Any feedback by now? Thank you very much. For the time being there is no signal to tell that it's going to be negative. What is going to be the potential impact? We are doing market research, but this is just mere market research. The prescription trends in the field would be the best performance indicator if there's anything to add. Claus. You summarized it very well. Naoki prescriptions are continuing their upward trend and anything else will have to wait for the market research to read out. Thank you. Thank you very much. That's all from me. Thank you. Next question. J.P. Morgan Securities. Mr. Wakao, please. J.P. Morgan. Wakao is my name. Thank you very much. My question is for Aizawa. This is a question I should be asked because you cannot answer. But still, with regards to the way of answering by Okamura-san, I would like to have a deep understanding. So please tell me. In the case of impairment loss, well, currently JPY 60 billion is expected. So a certain level can be absorbed. I think that's the way of your expression or explanation. But U.S. sales status and with regards to EU, the filing will take place at each country. And you're thinking about the development in the Japanese market. So current JPY 60 billion I believe. I assume that still impairment loss could be within the scope of this JPY 60 billion expected. Is it too optimistic? There might be just a nuance why the explanation would be still helpful for me. Thank you very much. When we acquired Iveric Bio, partial ex-US allocation precondition was there. That is, the market should be outside of the United States. However, Europe, roughly speaking, or Japan. Those are the countries that we incorporate for the evaluation earlier phase that is considered as the foundation of the forecast. As you know. Now, Europe is separated, not centralized for the submission, and also Japan, which we didn't have any plan. We started to see the value of the regulatory pathways to go for the approval, so at the time of the assumption of PPA, some countries are not included, but now they are potential, as Taniguchi mentioned, so we've started the preparation already. Therefore, this JPY 1.1 billion is realistic rather than just perspective. Further, we would like to think about various factors and situations to consider objectively the value of this outside of the United States, and based upon that, we would like to calculate the impairment loss. And this JPY 60 billion as a whole that is not this all is not the impairment loss, but JPY 1.1 billion intangible assets outside the United States, and because of that we withdrew our submission in Europe, so it might be considered that this JPY 1.1 billion is all for impairment loss. In order to avoid that misunderstanding, I made that expression understand. I stop her e. Second, that's about the future. Next fis cal year and afterwards I have a question about XTANDI parts of biosimilars. You made explanation and they are quite steadily progressing and my concern is XTANDI this time you made an upward revision so it is progressing in a steady manner. But IRA impact in the next fiscal year and afterwards this fourth quarter, JPY 8-10 billion or JPY 8-100 million. And considering this, this IRA impact would take place throughout the fiscal year. I understand about that. But IRA out of pocket is set as a $2,000 and also mCRPC that is on the progress of the market expansion and that is likely to impact into the next fiscal year as well. So all in all in the next fiscal year do you think it will grow further? I think you are going to scrutinize it further. But as of this moment, especially in the United States, how do you view about the trend in the United States next fiscal year? Thank you very much. I don't want to say something irresponsible so I don't want to go into details or that deep dive. But just like Wakao-san mentioned, basically the number of the patient is on the increase and mHSPC, CSPC. Of course the patients receive the treatment earlier phase and also the duration of the admission will be longer and M0 CRPC, CSPC. Well that leads to the ripple effect for other indications as well and the patient will pay less. Therefore, in terms of the affordability, those patients who receive their drugs without making any payment would now be shifted toward those who need to pay. So the balance of the patients will be different. So there are so many factors mixed up and in a net it's very difficult to tell. So 2025 and afterwards when we made the announcement of the FY24 as a whole full year, we'll give you the guidance for FY25 at that time. You might say that this is just one-fourth, but this calendar year 2024 first quarter situation will be more clearer. So based upon that I would like to explain that at that time. Claus, do you have any additional comment on this? Thank you, Naoki. I think we need to remember that the volume growth of this market of this class is still double digit. That's true not only in the United States, but essentially across the world in many, many countries. So we have a very strong volume momentum behind Xtandi and the class that Xtandi represents. So the question of the IRA impact and other pricing impacts that we will have to face is, as Naoki has said, the question will be which of these factors is dominant? The pricing factor or the fact that patients stay longer on drug or the volume growth of this market. And that's what we'll have to calculate and then give guidance on when we look at FY25. Very clear. One last question regarding the cost. You're going to ensure good cost management and cash flow. Compared to your assumptions, it's going to be better. Regarding capital allocation, I have another question to you. This is going to be a future discussion point, but the profit level is going to be high, then dividend increase and shareholder returns. There would be high expectations on that, but at the same time, you have JPY 900 billion of loans or borrowings. You may give priority to the repayment of loans. Shareholder returns. How much is the room to use the money to make shareholder returns? There is a table showing the possibility of shareholder returns and increasing the dividend. What's the situation? Capital allocation approach from a long time ago remains the same with consistency. We'd like to use the money for the business growth investments. In terms of shareholder returns, the dividend in the longer term would be increased in a stable fashion. In the longer term, if there's still excess cash, we would buy share buybacks. Buy our own shares flexibly. In a different way, we'd like to return the money back to the shareholders in a different way. Based on the original plan. We developed other plans. But if there's going to be an excess cash above that level, based on the current situation, is it better to repay borrowings or is it better to invest in our businesses? We have the initial guidance. JPY 74 as a dividend payment. Or is it better to increase the dividend? There would be a variety of options. We will have excess cash to begin with. What is the amount if we buy our own shares? Is that going to be a size and scale which is meaningful enough? We have to consider and think about which option to take. As you said, if we have long-term borrowings for too long to do our business, because of the nature of a business, I think it's a bit risky. So at a certain pace, we have to repay the interest-bearing debts. If we have excess cash, are we going to repay at an accelerated pace? Or are we going to use that for other purposes? That is going to be considered by Kitamura-san. Anything to add? Thank you for the question. In principle, I agree with what Okamura said. You may say what if, but we have to achieve good business results and based on a capital allocation, we have to make investments for growth. We have to consider the balance vis-à-vis the borrowings and loans and average bill liabilities. In five-to-seven years, we are going to pay. That is going to be repaid. So first we have to increase our profitability for sure. That is the most important thing. So continuously we'd like to work on this. That's all from me. Thank you very much. Having said so, core operating profit is increasing. So I think it's improving than before. Right. In principle, the performance as far as we see up to the second quarter, and it's not just because of what we did in the past two quarters, but including what we have done so far compared to the initial forecast, we are progressing very well. I think we can say so. Thank you very much. That's all from me. Thank you very much. Thank you. Next, Morgan Stanley's Shinichiro Muraoka, please. Good afternoon. Shinichiro Muraoka is my name. Thank you. Extend the January to March R&D negative impact trial calculation range is expanded because of the increase of the sales, so if there are some other factors involved, would you please explain that? That's the first question from me, thank you. In my understanding, just the denominator becomes bigger so this mode application leads to the bigger number. Could you answer this, is this answer right? This is just the mathematical calculation of the IRA Medicare Part D impact as it's been laid out in the legislation by the U.S. Government. Thank you very much. Next is about Xtandi. Once again, I haven't studied this yet much but Pluvicto by Novartis is doing quite well. So pre-taxane therapy also incorporates that product as well. So looking at FY 2025 and 2026, concerning the competition of the Xtandi, is it going to be the bigger competitor for you or it is not necessary to consider about that regimen as the competitor? I can try. I mean essentially the competitive landscape with new launches into this market, they're coming into very, very late stage populations. As you know, with EMBARK, we have been able to position Xtandi in the very, very earliest stage and we're the only compound that has that data set. So our position, Xtandi's position in this class is absolutely unique and doctors are recognizing that. And we're seeing the good response to the EMBARK data. So the question really is what is the competitive landscape in the early stages of the disease? And there our competitors are well known to you. It's Johnson & Johnson with Erleada and it's Bayer with Nubeqa. Thank you very much, and the last question is about the capital allocation. Probably my question is a bit with a different angle, so acquiring a new drug from outside. For the primary focus, next year four PoC judgment will be available. And if all of these four make a success, then you don't need to acquire something big from outside. Is it okay to consider it that way, or it's not like that. Whenever if you come up with something new as a candidate, then even from the beginning of the next fiscal year you are going to acquire such a candidate. Would you please sort out the situation for you? T hank you for the question. Considering only about the BD, then primary focus flagship situation, well, of course good is good, but it's that. So we make a judgment depending on the situation of that. But what is great about the primary focus is when a flagship makes success, there are following projects waiting after that success. So for example Immuno Oncology or the targeted protein degradation, we have the next program so just before the clinical phase. So what I want to say here is that if such a great things happen, of course I would be really happy. But making success with these four flagships would lead to the late development of things. But at the same time the following programs would follow. So it's going to lead to the really big cash needs. Even in that situation, would we need to do a BD or not? Well, the individual BD of this is good or bad, that is a different decision making phase. Or, I rather don't want to say about this, but if flagship clinical POC is not really good, that means from this 2030 and afterwards. In other words, X tandi business is attenuated and that is covered by the strategic brands. The following growth will be covered by this primary focus products. So if you don't see any success for that, then at that time probably we need to do BD so that we can buy more time. That is likely what I think. But whatever cases, my answer is that BD, that is not something you can plan beforehand. This is quite a difficult area. So we would say that this is an ideal opportunity for us. But that is not always waiting for us. So I don't know if this is right way to say. But this is like the sushi on the conveyor. You want something, you want to eat something, but you have to wait until that dish will come, even if you would like to have it, so how our flagship would show the POC that really matters, so it is quite complicated and complex. It is a complex situation, so we have to make a decision case by case. Thank you very much. Next, Goldman Sachs. Mr. Ueda, please. Ueda from Goldman Sachs speaking. This is my first question regarding IZERVAY in the United States. Share is increasing steadily. During the presentation you talked about the assessment of safety in the selection compared to Syfovre. There may be a criteria. Any other points in the clinical settings? IZERVAY is performing very well. What are the factors behind? Anything to add from the clinical perspective? Taniguchi may want to say something, so first Taniguchi is going to respond. Then with regards to commercial aspect, Claus is asked to add. Taniguchi-san, please. Regarding IZERVAY, as was mentioned, safety aspect from the physicians we are hearing their feedback. Compared to the other company's product safety seems to be more favorable and higher. That is the impression of many doctors. GA associated with AMD may result in blindness in this disease. This is a very serious disease. Through treatment by receiving treatment, we would like to avoid adverse events as much as possible such as visual impairment. That is the wish of the doctors that is leading to the market share of IZERVAY. As for the efficacy, as far as I have heard, compared to the competitor, there is not much difference according to the feedback we have received in many cases. So the efficacy safety balance is being considered. That is why we are getting this market share at the current level. Claus, anything to add? Yeah, I would like to give a perspective. Thank you, Tadaaki. But you know, as Tadaaki said, this is a serious disease. We're estimating 1.5 million patients in the U.S. alone that have not had any option for this disease until the launch in FY23 of two products. So what you're seeing is two things. Number one, patients who have not had an option for a long, long time are coming to the doctors to be treated. So that's the one wave that is pushing the development of this market. And the other thing is then that doctors are favoring our product. As Naoki said in his presentation, we're estimating 60% of new patients to be placed on IZERVAY at this point. Yeah. So that. That gives us a very good feeling that A the product is doing what it's supposed to do and B that the safety profile is being recognized in the marketplace. Yeah. Now let me just remind you it's been only one year since we launched IZERVAY. So this is a fantastic result both in terms of the market growth as such, as well as the market share, the new patient share that we've been able to achieve. Thank you very much. I have the second question regarding the introduction of AVB101 regarding the indication it's a franchise you didn't have in the existing business before. And regarding the gene therapy in the existing pipeline there was delay in development. But in your in licensing what is the point you kept on in mind in licensing this compound? Thank you for your question. First I'd like to briefly explain and then Taniguchi and Claus, Shitaka can respond. First, the target disease. Developed in very famous people who confess that they have this disease. It's a topic people are talking about and basically it's progressive. There's no treatment for this. This is a transformative treatment required in this field. When we have gene therapies for the future, we are hoping to expand. This can be a technology platform we can use to expand into various diseases into the future, but the target disease for the time being is monogenic. There is a single gene deletion or missing which is a cause of the disease. Roughly speaking, neuromuscular disease or CNS diseases I think I can classify as such. We acquired the option for this project. The latter CNS disease of which is monogenic and that is going to be the category it's going to belong to. Generally speaking, gene therapies in very serious diseases without treatment options mostly if you look at the prevalence, there's a certain number of patients already, but every year how much of them develop the disease the number is going to be very small in most cases. So when the gene therapy product becomes available while the treatment is spread amongst the patients been long waiting for the treatment and when the drugs are utilized amongst them, their performance after that is greatly reduced. So the trend is going to be quite spiky, and the disease that we gained the option right this time. Well, because there is no option of the treatment, the prevalence is higher, there are many patients and considering the demographics, the development or the incidence rate would follow. So it's not exactly the spiky, but the sustainable business is possible to be expected. So that's the trigger of this deal. This time, whichever case is well, at this moment of time, we acquire the company or we acquire the asset. It's not something like that. We would refer to the data from ongoing clinical trials and with that we can make the decision if we go forward or not, and once the data becomes available, if the data is really good, then every other company would like to jump on that, so the price goes up and it will be more competitive, but for us, when we execute the option with what conditions that asset is possible to be acquired. That is predetermined. So even the price goes up, the already defined condition is applied for our acquisition, so this is the structure of the deal, so we reduce the risk and once a good readout becomes available then we don't need to pay excessive amount. This is not the deal that I myself did, so as a person who got involved in the bd, I think this is a really good approach. That's all. Let me make some additional comment from BD's perspective or deal perspective. Okamura gave you a very detailed explanation. So here I would like to make the medical perspective comment. Why did we make this contract of the license with them? This disease? This is the dementia from frontotemporal dementia. So this is what is called as early onset dementia. This is really devastating form. With the age of 40s-60s the diseases developed and within three to 13 years the patient dies. So this is really devastating disease. And also at the same time medical needs is really high. On top of that progranulin disease GRN that is identified as the progranulin gene. So the target gene is quite clear. And when the disease has such a clear target gene, then a gene therapy has a high potential for the method of the treatment for those population. There is no existing treatment, and there we can bring new therapy. In that sense, this program is extremely wonderful. That is one thing from me. Point two from me is that we have AAV8 based genetic therapy is on the development phase ongoing, and we have experience of gene therapy for mainly rare diseases. And there we established an experience together with a view to as early as possible. We would like to support the development in appropriate manner, and we might be able to go forward after going this option. Right? This frontotemporal dementia is the target for. This. Product and the population of the patient is likely to be bigger than what we targeted in the past. Gene therapy only for the rare disease is economically difficult as a business, so as a coming strategy of Astellas for gene therapy, we also would like to target to the larger population of the disease, so this Aviado Bio collaboration is really fitting the aspect that we are looking at, and just like Okamura mentioned a little while ago, for this option contract the ultimate final decision is after result, so this contract itself, well, we can make our judgment after we see the data, so it is relatively safe. We can have good understanding about the data, and also, we can also view about the regulatory perspective including FDA as well to make a final judgment if we execute the option right or n ot. In that perspective we believe this is really good contract. Understood. Thank you very much for explaining the details. That's all from me. Me. Thank you very much. Next, Nomura Securities. Matsubara-san, please. Matsubara from Nomura Securities, can you hear me? Yes, we can hear you. Thank you for explaining. I have a question about IZERVAY regarding label update and DTC activities or campaign. If prescription is going to go up. But looking at the GATHER 2 disease, after two years, there was not much difference in the visual acuity. Is that going to affect the prescription into the future? What's your view? Thank you very much. First, clinically speaking, how to interpret GATHER 2 data will be explained by Taniguchi and then how this is going to be perceived in the market. That is going to be additionally explained by Claus later. Taniguchi, p lease. GATHER 2 results and the BCVA. You are talking about the best corrected visual acuity secondary endpoint. That is the secondary endpoint being assessed. BCVA is being used in the assessment and limitation. There are assessment challenges. GA lesions in the retina. In which area in the retina the GA lesion could occur? Depending on that, how patients are able to see would be very different. There is a difference. You may know ophthalmology very well, but from the central fovea, it's going to be closer to the central fovea or is that going to be far away from the central fovea in terms of the lesion? Depending on that, how patients are able to see would be very different. The missing part, individual field. Depending on the patient, that location is different. So by measuring a BCVA, what is the clinical meaningfulness or significance to how appropriate it is to measure the efficacy? That's a challenge. Regardless of the location in the retina, the progression of the lesion can be slowed. We think that's very important. So irreversible retinal cell death could progress. Then BCVA will decrease and there can be a variety of retinal visual impairment. We hope that those patients will be treated earlier. Thank you. So Tadaaki explained the link very nicely between the functional endpoints and the lesions that we see growing in this disease. I think your second question was on the DTC, if I understood correctly. Is that correct? Yes. Yes. So let me explain how we see this market developing. As I said in an earlier answer, this is a disease where there's been no option at all for many, many years. So what you first see is patients who have been waiting for an option to come back to the doctor for treatment. But not everyone in the patient population knows that there is a new option available. So we have to make that known. And that is where the direct to consumer is playing. So we're really trying to essentially already anticipate that the current penetration rate will have to be enhanced by informing more patients of new, new treatment options available. There's one other way that we're thinking about increasing the market as such, and that is if you think of the way patients go for their checkup in ophthalmology in the United States. You have the retina specialists. The retina specialists are the ones who are doing the injection for a disease like geographic atrophy. But there's also many, many, many ophthalmologists who don't have that specialization. So we are, in addition to DTC, we're also thinking about how can we potentially reach these generalist ophthalmologists and help them diagnose and understand the disease and then refer to a retina specialist to treatments. So these are both mechanisms that we are exploring to make sure that the treatment that is IZERVAY and the hope that IZERVAY provides really reaches every patient, every appropriate patient in the marketplace. And for that we have to communicate directly to the consumer and that's the DTC campaign or we have to communicate to the generalist ophthalmology to diagnose and then refer the appropriate patients. I hope that helps explain how the dynamic of the market, we see it changing over time. We're now only at the very, very beginning where the patients who are interested and who know and who are always asking for new options are now coming back to the retina specialist for consultation and for treatment. But that dynamic will change over time. Thank you very much. The second question is about the cost aspect of DTC. I understand it quite well. But VEOZAH DTC is also what you are going to do. What is the cost or expenses perspective? Would you please make a comment? Thank you. Generally speaking, the several channel mix is considered. So if we consider that is effective, we will continue or we will expand it further. But if we cannot get the impact, positive impact that we expected, then we would stop. So the measures will be turned over depending on the situation. More specifically what we are concerned about. If you have any additional comment about that, would you make it Claus? So Naoki is absolutely right. We are looking very, very careful, carefully at channel mix and we're looking very, very carefully at ROI of the DTC campaigns. You know, and there's data points we can use to measure the impact of the DTC campaign. It usually comes with a little bit of a timing delay. So, in either way, we will probably need some time before we can make that assessment. But in VEOZAH it's now already very clear that our DTC campaigns are correctly sized and are yielding the results that we anticipated. Thank you. That's all from me. Thank you very much. Next, Mitsubishi UFJ Trust Bank, Hyogo-san. Please. Mitsubishi UFJ Trust Bank Hyogo is my name. Thank you very much for giving me this opportunity. Thank you for your presentation. One question from me, page 19 sustainable margin transformation is my question. Thank you very much for making this kind of presentation material this time. My question is, what is considered as a challenge to share this slide with us and what exactly do you want to do? That's the core of my question. This core operating version, that's what you have been quite particular about for the operational excellence. You always aiming for the profit margin increases and looking at these items, many of them are quite orthodox if I use this term, which means that there is nothing new much, there is nothing added on. But you share this slide with us. That's because you have a strong commitment on these numbers. Or you also would like to communicate this internally as well as saying that you haven't done everything well, so you would like to improve that part. So what's the significance of this slide? What are you thinking? That's m y question. Thank you very much. Kitamura is going to directly respond to you. Thank you very much. First of all about the challenges. When does the fiscal year started? Or in other words, at the end of the time of the last fiscal year. Financial announcement for the review of CSP 2021. There are three targets are reviewed in terms of the progress and their cost management or margin improvement or the cost management. Those were not well done in the first three years. We haven't done in a sufficient manner. That's what we feel. And also on the other hand, in order well for the improvement of productivity. Yes, we've been doing each matter, but that is controlled in the company as a whole for their cost management especially, well, this kind of initiatives have been studied about once a year and we also worked for the establishment of the mechanism for that. Just like Okamura mentioned, looking at our growth strategies, we see the growth room for the strategic brands including LCM as well, and if POC is judged and established and coming toward the later phase of the development, there is a higher demand of R&D cost, so we have to review our calculation if that is the right calculation or not. That is revisited and that result is reflected into this slide, and also on top of that there's still room for the growth, so we can spend all the asset or the budget into it. It's not like we also have to have a view about the profitability. We do the investment for the growth field at the time we need to see the profitability. That's our commitment for the management of control. It is said that if the margin increases, then what kind of capital allocation we could think about. Of course, at the same time we need to think about the return of the borrowings. If it has the capability of gaining the revenue and a profit, then capacity of the borrowings will be increased as well. So thinking about their long term sustainable growth, for us this is quite a necessary approach. So we will do this. We can do this. That's why we share this with you this time. Thank you very much. Then before you were doing this already individually, but including the top down management, you have not been able to do this because of the gross investment. It was kind of mixed up. But with a certain mechanism you can now manage very well. Is my understanding correct? Yes, you're right. Understood. Including the companies you acquired, you're going to ensure that management, that type of management. Yes, of course. Understood. Then I don't know in fiscal years. But you will give us an update on what kind of benefits you are achieving. I'd like you to show into the future and among employees. Is this ensured among your employees? What's your impression? An initiative like this, even because of the top down approach, the bottom part may not catch up. It may take time for this to penetrate at many companies over time. Changes may not be being expressed as benefits. Because of an orthodox item, it may take time. That's my view. What about the penetration of this among your employees? This is my last question. It is penetrating. Among our employees we talked about the Growth Strategy Board ambition and sustainable margin transformation. I talked about three. These are the three enterprise priorities we are working on. And top-down approach is one thing. But in a bottom-up approach, how much we can do. We are accumulating the initiatives under a variety of ideas. In that sense, this is an enterprise-wide initiative. It's not just being talked about by the top management. But I'm sure this is penetrating in our organization. Thank you very much. That's all from me. I am counting on you with high expectations t o you. Next, today from 5 p.m. there's going to be another earnings call by another company. So in four or five minutes we'd like to close. Sanford C. Bernstein, Ms. Sogi, we can entertain just one question from you. Thank you very much. Sustainable margin transformation is a topic I'd like to ask you regarding the development enhancing in-house capabilities. Specifically what kind of initiatives are you working on? Ms. Sogi, thank you for your question. I've explained the overall situation for details. Taniguchi can add. Up until now, in the conduct of the clinical studies, we almost depended on CROs completely. By using CROs, there are benefits as well. For example, a phase 3 study with 1,000 patients in each arm. We cannot do this alone. So we have to approach a variety of study sites. To join us in our study, we have to spend a long time. We have to monitor the patient enrollment process. A third party with a broad network can do this. That was meaningful enough, but from some time ago, and if you look at the future portfolio to come, that kind of a clinical study will not exist at all into the future. If there is a middleman in between the investigators joining the studies, and we may not be able to communicate directly, but rather we can go there directly to talk with investigators, that's more valuable. That's very evident, so we used to pay money outside to CRO for outsourcing, but rather we can do the operation of clinical studies. Once again that's being restored. We did this in the 20th century, but we changed it to a zero approach. But because of the progress of a pipeline and conducting the clinical studies is a core capability as a pharmaceutical company. So depending on third party in this regard is not so good. So we are trying to do this internally. If there's anything to add Taniguchi on please Okamura already explained but if you just depend on outsourcing, it's costly. And in terms of capabilities, what's happening at study sites and what are the issues how we can address the situation quickly we have to think about may not be the best option in all cases. So there were such big issues. So, CROs. We will continue collaboration with them where necessary. But internally global clinical studies can be done. We'd like to have such a structure. At the same time, cost management there can be done by us. By establishing such a structure, we can reduce outsourcing cost, but also in the study we can enhance efficiency within the study. More recently, digitization or the use of AI can be done to enhance efficiency and quality. Various companies are working on this challenge, so such capabilities can be developed internally. In addition to cost reduction, quality can be higher at a faster sense of speed in the conduct of clinical studies at a relatively lower cost. We'd like to make efforts to that end. Thank you very much. Thank you so much. I'm sure that you are waiting for the timings of the questions, but because of the time, with this, we would like to close today's announcement. Thank you very much for your participation.