Okay. Welcome everybody to Jefferies Global Healthcare Conference in New York. My name is Stephen Barker. I cover Japanese pharma stocks for Jefferies out of Tokyo. It's my pleasure to introduce Astellas Pharma this morning, represented by President and CEO, Naoki Okamura. Good morning. Also we have Chief Research and Development Officer, Tadaaki Taniguchi. Good morning. Thank you very much for joining us. I think we have some slides. Hopefully we'll have some time for some Q&A at the end. Okamura-san, Thanks very much, Step. I'm Naoki Okamura, President and Chief Executive Officer of Astellas Pharma. Thank you very much for joining us this morning. We just released the new five-year corporate strategic plan or CSP 2026 last week. Let me go through very quickly with the material which the complete set of information will be available at our website. We have a vision that says, we try to turn innovative science into value for patients. We define this value, the all capital value, very clearly, which is outcomes that truly matters to patients, divided by the cost to the entire healthcare system to deliver those outcomes. Astellas is aimed to create and deliver the all capital value for patients. This is kind of at a glance of Astellas. We achieved a record high revenue in FY 2025, which is JPY 2.1 trillion revenue. For your information, our fiscal year runs through from April to the March next year. FY 2025 means the fiscal year ended March 31st, 2026. With that, we have a 26% core operating profit margin. It is growing very nicely. We are operating in 70+ countries and regions. We are headquartered in Tokyo. We are listed on the Tokyo Stock Exchange, we believe we are a truly global company as the more than 85% of our revenue comes from outside of Japan. For us, innovation is our lifeline. Therefore, we reinvested 17% of our revenue to research and development for the past five years. This is the nutshell of our Corporate Strategic Plan 2026. We are trying to make Astellas a sustainable growth company by delivering profitable growth and generate cash, reinvest that cash to accelerate our pipeline-led growth. We established a discipline to how we allocate cash, and we continuously enhance our enterprise productivity so that we can create and deliver greater value faster. We set four strategic goals for the CSP 2026, as I mentioned. We will try to deliver the profitable growth and generate sufficient cash to reinvest that to accelerate our pipeline-led growth. We have a very strong discipline to how we allocate cash between investment versus shareholder return. We restlessly enhance our enterprise productivity. Some of the key deliverables to confirm we are achieving those strategic goals. In the research and development area, we are aiming to start 10+ phase III or pivotal studies during the CSP 2026 period. Out of that, 5+ will come within FY 2027, so in two-year timeframe. In terms of the financial guidelines, we will try to double the sales of the five strategic brands, which I will touch upon later. We try to do recurring cost optimization commitment, JPY 200 billion, at the end of the CSP2026. We try to establish the profitability structure of we can maintain the 50% core operating profit before research and development. In other words, we try to establish ourselves to maintain the 30% core operating profit after spending 20% on research and development. This is a very illustrative revenue forecast. This year, FY 2026 is going to be the highest revenue year with JPY 2.2 trillion. We have the slightly gradually decreasing XTANDI sales, therefore, we hit the inflection point in FY 2029, to go back to the pipeline-led growth. As I mentioned, we are aiming to achieve the record high revenue at mid-2030s. Actually, I would like to emphasize the bold, solid black line, which shows that the strategic brands as well as pipeline-led growth has already started, and it continues to go with the strong growth of the strategic brands. On top of that, we will have the pipeline programs coming out of our pipeline. Let me go first. This one. When we say strategic brands, we have PADCEV for bladder cancer, IZERVAY for geographic atrophy secondary to age-related macular degeneration, VYLOY for gastric cancer, VEOZAH for vasomotor symptoms for menopausal women, XOSPATA for AML. Actually, during the CSP2021, the previous five-year strategic plan period, the sales of these five strategic brands have grown almost 10 x. We are trying to continue the strong growth of those five strategic brands to double the sales from those five. It is, of course, the expansion of the geography for the current indication, but at the same time, we are doing the life cycle management type of additional indications or the additional formulation for some of those products so that we are looking at those as the key growth opportunities. The weight of the strategic brands used to be 23% back in FY 2025, but it is growing, XTANDI is declining. In 2030, the strategic brands will represent more than 50% of our revenue. Those strategic brands are almost fully owned or internally developed. We don't have to pay any royalty or milestone payments to third parties. The shift of the weight of those strategic brands, 23% to 50%, means we can improve the profitability structure so that we can get to the right-hand side pie chart. You can see the red one, operating profit plus R&D can represent 50% of the revenue. On top of that, we are committed to continue our cost optimization initiatives and already committed JPY 40 billion in FY 2026 and JPY 45 billion in FY 2027. We have identified all the measures and initiatives so that we can get to that point. On top of that, we continue the additional initiatives throughout the period of CSP2026, so that the coming five years in aggregate, we are aiming to achieve a JPY 200 billion recurring cost optimization target, including the JPY 85 billion that we have already identified. Let me turn into the research and development. We take a relatively unique research and development approach we call Focus Area Approach. We start with the biology, with the strong disease linkage, try to identify the best modality or the technology platform to address that biology. Finally, we try to figure out which is the best patient population to benefit from the combination of biology and modality. This is a very busy slide. When we have the triangle of biology, modality, and disease, we call it a primary focus. Once we establish the triangle, we believe we can produce multiple projects from that triangle. We have now four primary focuses. With the value-enhancing BD activities together, we have built up a robust pipeline now. If you look at the pink box at the center of the slides, you have four programs coming out of our primary focus that have achieved the clinical POC and moving into the phase III clinical study or the pivotal study in coming, say, two years. It's not that obvious, but there's a gray box under the pre-POC arrow which is getting closer to the clinical POC judgment in FY 2026 and 2027. If successful, they are moving quickly to the later-stage clinical development. We are hoping to gain JPY 1 trillion revenue in mid-2030s from all those pipeline programs. I would like to emphasize that sometimes our Focus Area Approach is very fragmented, doing this and that separately. Eventually, we are aiming to really establish the franchise. For example, the prostate cancer starting from the XTANDI, and we are moving to the newer innovative products in prostate cancer. We also have established the CLDN18.2 franchise with the monoclonal antibody bispecific and ADC. We are doing the same for the ophthalmology, IZERVAY on the market, but ASP7317, which is the cell therapy targeting the same indication coming into the later-stage clinical study. We have Universal Donor Cell technology applied cell therapy in the pre-POC stage. In the R&D, it is critical for us to continuously improve the productivity by integrating the internal and external collaboration. We have introduced a new working operating model, which is empowered small cross-functional team responsible and accountable for end-to-end process from the drug discovery research to the end of the life cycle. We are quickly embedding the data-driven decision-making. We are increasing the speed of clinical trial execution by internalizing critical capabilities, and using all those technologies. Of course, we have been constantly going through the ruthless prioritization of the programs based on the value that we can create. Value enhancing BD. When we see the shape like this, people sometimes ask me, "Would you not go to the BD activities to fill that dip in the revenue curve?" We decided that we don't do that. We call it revenue rescue BD because it's cash for cash flow type of transaction. There are very limited opportunities for us to add value to those assets. We are focusing on the value enhancing BD by proactively strengthen the pipeline that we have now, or some technology platform that can really leverage our existing capabilities so that we can add value after we acquire the asset in our pipeline. This is the discipline cash allocation chart. This is very complicated, but if you look at the left-hand side, you see the gray bar. We spent, in the past five years, JPY 4.2 trillion in R&D, strategic investment, and shareholder return. One of the most important strategic investment, which was the Iveric Bio acquisition, was funded through the debt financing. Therefore, the net cash that we generated for this investment was JPY 3.4 trillion. That is JPY 4.2 trillion -JPY 800 billion. If you look at the center of the slides, we are forecasting we can generate JPY 4.3 trillion, even with the declining XTANDI revenue. We have decided to invest JPY 2 trillion in R&D, reserve JPY 850 billion for the strategic investments, while we reserve JPY 750 billion for the shareholder return based on the annual JPY 2 per share dividend increase for the entire five-year period. This is a very flexibility-driven strategic plan for us. If something happens to our pipeline, we can use that R&D expense to the strategic investment. If we can generate more cash, we can think about how we allocate that to shareholder return or the additional strategic investment. We have a very good operating model, end-to-end operating model that I mentioned. We kind of renewed our corporate values and behaviors. We have a good, robust corporate governance structure. The CSP2026 has been produced through the thorough discussion with the board and the executive team. We have a great monitoring capability from our board. Let me finish with the key takeaways. We try to make Astellas a sustainable growth company by achieving pipeline-led record high revenues by mid-2030s. How we can do it? We deliver profitable growth and generate cash. We invest that to accelerate pipeline-led growth. We establish discipline for how we allocate cash, and we continuously enhance our enterprise productivity. That concludes my presentation. Thank you very much for your attention. Okamura-san, thanks very much. We do have a few minutes for questions. There's a microphone available. If you'd like to ask a question, please do speak into the microphone because we need it for the recording. I'd like to ask a question first of all to you, Taniguchi-san, about your K-RAS strategy. Revolution Medicines has been making headlines earlier this week with their pan-RAS candidate, daraxonrasib, in second line pancreatic cancer. Is this good news or bad news for Astellas Pharma's K-RAS strategy? Thank you. Thank you for the question. I think just step back, what we're actually working on, particularly looking at pancreatic cancer, which is really predominantly caused by K-RAS mutation. Now we have a technology like targeted protein degradation or molecular glue that we can tackle with this difficult disease or difficult pathway that we are actually going to really transforming the way we actually treat cancer, like pancreatic cancer. Just looking at our data and the Revolution data, it's pretty much consistent in early stage phase I or phase I-A and so on. Also we just aware that their headline that they actually finishing the second-line or later-line pancreatic cancer, which is actually remarkable efficacy actually shown in their trial. What we think is that this is also pretty much encouraging for us that our KRAS product potentially work in first-line pancreatic cancer that we actually already started phase III trial. Of course, strategically, this is different because our product, setidegrasib, purely targets KRAS G12D mutated pancreatic cancer. Of course, their product is more pan-RAS inhibitor. Degrader versus inhibitor, and the target is also different. That's some uniqueness that because of this target, and particularly focusing on the safety profile, I think our product, setidegrasib, is quite clean product, and it's quite encouraging that we can actually easy to combine with the current SOC like the chemotherapy. We just started a phase III trial in U.S., Japan, and Europe, and of course, China. I think this is also very important, the strategically very important product we can actually really bringing the new medicine and new value for the patient in near future. Can you comment on the timeline for the pancreatic cancer first-line study? Of course, we just started up the trial, good news is that we have a very good uptake from the investigator who actually bring to putting the more patient in the trial. Our current estimate is that we can have a fast top-line result around 2029, although this is also depend on how we actually going to go in term the patient recruitment as well that this is event-driven trial that we need to wait until the time that we have enough event that we can actually analyze the data. Any questions? Oh, okay. Well, let's keep with the KRAS. You're also developing it for other indications beyond pancreatic cancer, I believe. Yes. Of course, KRAS G12D mutation is actually occurred around 40% of pancreatic cancer. Initial target is pancreatic cancer. We also know that around 5% of non-small cell lung cancer actually have a KRAS G12D mutation, which is 5% of non-small cell lung cancer. It's not so small, right? Like ALK is exactly the same 5%. We think this is also extremely important, the indication that we actually going to start the second-line non-small cell lung cancer, with KRAS G12D mutation, this year. The trial is going to be compared to the current SOC, the chemotherapy versus our setidegrasib monotherapy. Obviously, after the treating first-line with the checkpoint inhibitor and chemo, that nothing work except the chemotherapy. This is also huge opportunity that we can actually transform the way we actually treat lung cancer in near future. Yeah. As you mentioned, your asset, setidegrasib, is a degrader. Is there something about degraders for this particular target that could potentially have advantages over the traditional small molecule inhibitor approach? I think it's inhibitor versus degrader. This is quite different. Inhibitors basically inhibit the pathway of any kind of oncogenic molecule. I think degrader is really degrade target protein per se, that at least we've shown in the setidegrasib study the approximately 95% of KRAS G12D actually degraded by setidegrasib. This is quite encouraging. The uniqueness of degrader potentially is that we may have quite different resistant mechanism, right? If you actually, for example, treating the KRAS with inhibitor, we see that many patient have a KRAS amplification after that. We don't see that, of course, because we degrade the target protein. I think this is a quite unique target that we can actually use much broader than even KRAS or RAS target. Of course, you have another KRAS targeting program, ASP5834, also a degrader. What's the strategy there? How does that fit in with the overall RAS strategy for Astellas? Yes. I mean, if you was thinking of RAS overall, is actually have approximately 70% of cancer actually have some sort of RAS mutation. 5834 is actually have a multi-RAS degrader. Of course, initially we can actually start with pancreatic cancer, which approximately 90% pancreatic cancer have RAS mutation. What we actually hope is that, of course, setidegrasib is really purely focusing on the KRAS G12D, but we can expand the target with 5834, which is a pan-RAS degrader. I think this is also strategically very important that we already started the phase I trial in the U.S. and Japan, we actually going to accelerate this program as well to moving forward to actually covering much wider range of the cancer to treat it with degraders. You also have a very strong strategy in the Claudin 18.2 area. Obviously, you're a leader in this field with VYLOY, which has been growing a lot faster than I think, more certainly than I expected. That's been a great success. Could you tell us about how these two follow-up candidates you have in development, how they will fit into the overall strategy, please? Yes. As you mentioned, VYLOY is quite successful, not only in Asia, like Japan or China, but I think growing very quickly in the U.S., particularly because U.S. also have a lot of gastric cancer patient. We think that we can continue to lead the Claudin 18.2 targeted product. As you may know, there are a lot of companies started coming to this space, but I think we have ASP2138, which is a CAR that, the Claudin 18.2 CD3 T-cell engager, which is already showing encouraging data in a front line of gastric cancer in combination with checkpoint inhibitor and chemotherapy, that we are actually going to start phase III study targeting a first-line gastric cancer. Differentiating from the VYLOY is really focusing on Claudin high, we actually can expand with the ASP2138 targeting Claudin low to mid that we actually can differentiate from the VYLOY and ASP2138. I think what I see that the most encouraging data is, of course, one is the durability of the response with this product, because this is a T-cell engager, it's really targeting like an IO. As well as we see the pretty good safety profile that we are actually showing that. I think this is also quite encouraging that we can really start a phase III trial this year. In addition to that, partnering with AbbVie, we have ASP546C, which is a Claudin 18.2 target ADC. This product is already moving forward to the phase III in China, we also actually partnered with AbbVie. We already started the phase II trial to confirming the data coming from the China that we can actually produce in U.S., Europe, and Japan. We actually plan to start phase III trial globally next fiscal year. It's exciting. Of course, all of these clinical development, it costs money, Okamura-san, I was pleased to see slide 15, where your cash flow situation looks very healthy. Thank you. Yes, it is. As I mentioned, we spent JPY 4.2 trillion in the past five years, but out of that, JPY 800 billion was debt-financed. In spite of the declining revenue of XTANDI, we believe that we can generate more than JPY 4 trillion in cash for the coming five years. We can, of course, with discipline, we are going to allocate that cash to different types of activities. JPY 2 trillion, which is 30% more than the past five years. We reserve JPY 850 billion, which is almost $1 billion per year business development activities can be covered by this reserved funds. On top of that, we can return to our shareholders with the minimum annual JPY 2 dividend increase. It's a very flexible plan, and if we can generate more, we can consider how we can reallocate those generated cash. We can shift cash from research and development to strategic investment, including BD activities. A very flexible plan that we have. Yeah. You're heading into a significant LOE, obviously. As you pointed out, the margins that you'll be earning on the newer products, the core products which are replacing XTANDI, is a lot higher. You're in a very enviable situation where you can actually expand your margins through an LOE. Unusual. Yes. It's really fortunate that we have not the single big product, but a handful of multi-billion dollar potential products. On top of the profitability of those strategic brands, we continuously executing the cost optimization initiatives, and we have a very good track record of really achieving our commitment, and we try to continue that momentum for the coming five years. Great. Well, I think we're just about out of time. Okamura-san and Taniguchi-san, thank you very much. Thank you very much