Thank you very much for taking time out of your busy schedules to attend Chugai Pharmaceutical's FY 2026 second quarter financial results presentation today. My name is Miyata from the Corporate Communications and Investor Relations Department. I will be serving as today's moderator. Today's presentation is being held for investors, analysts, and members of the media in a hybrid format combining an in-person presentation and a Zoom webinar. Please note that if the name displayed by the Zoom participant cannot be matched with the registration information, the participant may be removed from the webinar without prior notice. Today's agenda is shown on the screen at the venue, on the webinar screen, and on page three of the presentation materials. We will proceed in accordance with this agenda. This presentation will be conducted in Japanese. Simultaneous English interpretation is also available via the Zoom webinar. To select your preferred language, please click the interpretation icon at the bottom of the screen. Select Japanese to listen to the Japanese audio or English to listen to the English interpretation. After selecting your preferred language, click Mute Original Audio to listen only to the selected audio channel. Please also note that we will allow time for screen captures before each presentation for those who wish to take them. We will take questions together after all presentations have concluded. We have set aside approximately 30 minutes for the Q&A session, and we encourage you to actively ask questions. Please note that all participants will remain muted during the presentations. Now, President and CEO Okuda will provide an overview of the second quarter of FY 2026. We will pause briefly at the beginning, so please use this opportunity if you would like to take a screen capture. Okay, let's get started. I am Okuda, President and CEO. I will provide an overview of the second quarter of FY 2026. Please turn to slide five of the presentation materials. For the first half of FY 2026, we recorded increases in both revenue and profit. This was driven by steady domestic and overseas product sales, as well as a significant increase in other revenue. Given the steady progress made in the first half, we expect to achieve our full year forecast. On the business front, we filed eight regulatory applications in Japan, making steady progress towards achieving our plan for the highest number of regulatory filings ever. We also initiated two phase III studies for NXT007, which we expect to become a next generation growth driver. Overall, both our financial performance and business activities progressed steadily during the first half. Next slide, please. This graph shows the changes in revenue compared with the same period last year. Revenue increased by JPY 84.8 billion, or 14.7%. I will walk you through the items from left to right. Domestic sales increased by JPY 14.6 billion as growth in mainstay and new products more than offset the negative impact of the NHI drug price revisions and generic penetration. Overseas sales increased by JPY 40.5 billion as increases in export volumes and the positive foreign exchange impact more than offset a decline in export unit prices. In particular, exports of Hemlibra for Roche and NEMLUVIO to Galderma increased. Other revenue increased by JPY 29.8 billion due to a significant increase in one-time income, as well as higher royalty income, mainly related to Hemlibra and NEMLUVIO. Domestic sales, overseas sales, and other revenue all increased, resulting in overall revenue growth. Next slide, please. Next, I will discuss two Chugai originated global new products that are important to our revenue growth over the short to midterm. NEMLUVIO is driving our revenue growth through export sales and royalty income. As announced in Galderma's financial results yesterday, global sales for the first half totaled $433 million. Its share of new-to-brand prescriptions was approximately 42% for prurigo nodularis and approximately 9% for atopic dermatitis, indicating continued strong momentum. In the U.S., NEMLUVIO is evaluated not only for its efficacy to reduce pruritus, but also for improving skin symptoms. That is leading to a high valuation by doctors and leading to prescription. Other than the U.S., we launched NEMLUVIO in European countries, and for some of the open countries and for these countries we see strong growth in the digital sales Other countries, we are now undergoing filing, and we expect to drive sales going forward. For Foundayo, we launched this product back in April in the U.S. for the indication of obesity. We started to recognize the royalty revenue based on the local sales back in the second quarter of this year. This product is prescribed to patients who are naive to GLP-1 products, and we will expand the overall obesity disease market. For access, this will be available not only by direct sales, but also a prescription via private insurance and Medicare is expected. We will expand the indication to type 2 diabetes and also in the U.S. and expand the indication in countries other than launch in the countries other than the U.S. Next, I will share the in-house project that will contribute to mid to long-term growth. REVN24, we confirmed biological POC among healthy adults in phase I, and we are preparing for phase II. We achieved our goal criteria for phase II. We are now preparing for phase II, targeting the post-cardiac surgery complication cases. There's no treatment available, and we believe that there will be high unmet medical needs. We will continue to work hard to provide this treatment to patients as soon as possible. AQUA07, this is the third macrocyclic peptide project entering the clinical phase. We received a Fast Track designation by the U.S. FDA in May. This utilizes our macrocyclic peptide technology, and binds to different location of fusion protein. This is allosteric inhibitor. We expect first-line usage of AQUA07 as a combination therapy with existing agent and efficacy in patients who develop resistance to existing agents. Lastly, let me share basic policy for capital allocation. We will make an active investment for sustainable business growth. In order to do that, we established Strategic Investment Department to develop investment strategy, discuss individual initiative, and lead promotion of investment. This department will drive strategic investment based on mid to long-term growth strategy and R&D strategy. We will continue a stable dividend payout ratio to shareholders, aiming at 40%. We will continue a stable contribution to shareholders. For this year, our expected yearly dividend will be JPY 132 per share. This is an increase in originally dividend for 10 years consecutively. That is all for me. Mr. Kusano will provide an update on the development pipeline. We'll pause briefly at the beginning, please use this opportunity if you'd like to take a screen capture. Now we are starting. I am Kusano, Head of the Project & Lifecycle Management Unit. I will provide an overview of the development pipeline for the second quarter FY 2026. These are the key topics for the second quarter. Regarding approvals, Alecensa received approval for an additional indication for advanced and recurrent ALK-fusion gene-positive solid tumors. Avastin was also approved for neurofibromatosis type 2, while Rituxan was approved for adult-onset frequently relapsing or steroid-dependent nephrotic syndrome. Regarding regulatory filings, Enspryng was filed in the U.S. for thyroid eye disease and was granted a priority review designation. The FDA has set the PDUFA target action date for October 15. In Japan, we filed Gazyva for idiopathic nephrotic syndrome and Perjeta for unresectable or recurrent breast cancer and for adjuvant therapy in breast cancer. Tecentriq for maintenance therapy following definitive chemoradiotherapy in locally advanced esophageal cancer, and sparsentan for IgA nephropathy. We also filed the drug component of the Port Delivery System with ranibizumab for neovascular age-related macular degeneration and diabetic macular edema. The medical device component had already been filed in March of this year. Regarding study initiations for our in-house product, NXT007, generic name zemosenik, we initiated two phase III studies in hemophilia A. For the Roche-originated product, CT-388, generic name enicepatide, following the previously reported phase III study in obesity without type 2 diabetes, phase III study was initiated in patients with obesity and type 2 diabetes. Next, tominersen was removed from the pipeline following a rushed decision to discontinue its development for Huntington's disease. Regarding readouts of MABKI in metastatic pancreatic ductal adenocarcinoma in the phase I-B/II-A study, the overall response rate was 52% among 29 evaluable patients. In addition, the phase III study of divarasib in second-line non-small cell lung cancer met its primary endpoint. At medical conferences, we presented phase III data for PiaSky in atypical hemolytic uremic syndrome, or AHUS, as well as phase II data for emricassabart in spinal muscular atrophy, SMA, and FSHD. zemosenik, vamikibart, and Gazyva received orphan drug designation. This slide shows the key R&D milestones for 2026. The underlined and bolded items indicate changes since the previous earnings announcement, as I've explained so far. We'll also continue to make steady progress on the remaining milestones. I will introduce AQUA07, an in-house developed allosteric ALK inhibitor. AQUA07 is the third clinical stage project to apply our proprietary macrocyclic peptide drug discovery platform technology, SnipeTide. We have just received confirmation that the first patient has been dosed in the study for ALK-positive non-small cell lung cancer today. Please look at the diagram on the left. All currently approved ALK inhibitors are small molecule ATP competitive inhibitors. They bind into the ATP pocket indicated by A in the diagram and inhibit ALK activity involved in cancer cell survival and proliferation. AQUA07 binds not to the ATP pocket, but to the allosteric site indicated by B in the diagram. Through a binding mode unique to macrocyclic peptides, which enables them to engage a broader surface of the protein, AQUA07 can target a site that is difficult for conventional small molecules to access, inhibits ALK activity through a mechanism distinct from existing therapies. Please refer to the illustration on the right. Existing ALK inhibitor sometimes generates resistance around ATP pocket, thereby reducing the efficacy of the drug. AQUA07, on the other hand, binds to different locations than existing drug. Therefore, we expect efficacy among cases with drug resistance. Also in the first-line treatment, we expect higher efficacy by using AQUA07 as a combination therapy together with existing ALK inhibitor. Well, this AQUA07 received a Fast Track designation by U.S. FDA in May 2026. We will aim to overcome resistance and also improve treatment for patients with drug resistance. Also we will continue AQUA07 development in order to achieve first in class and deliver this new product option to patients. Next, I will talk about PiaSky. We are indicated for atypical hemolytic uremic syndrome, or aHUS. Let me share the development status. Well, recently, we conducted phase III COMMUTE-A study targeting adults and adolescents, as well as COMMUTE-P study targeting pediatric patients. The result of this study were announced in European Renal Association in June 2026. Primary endpoint was the complete remission rate at week 25 among patients who are naive to complement inhibitor. The remission rate was 59.5% at COMMUTE-A study and 17.6% for COMMUTE-P study. Both of them were very good. Complete remission rate of 59.5% for COMMUTE-A study exceeded our predefined success criteria of 40%. Secondary endpoint was complete remission maintenance rate for patients who switched from eculizumab and ravulizumab. The remission maintenance rate was 100% for both studies, and then we confirmed the maintenance to efficacy to control disease for patients switched from other agents to PiaSky. In addition to that, naive patients who were on dialysis at baseline, in all cases they discontinued dialysis. For safety profile, there was no difference from the already approved profile. Also, as an exploratory endpoint, we conducted a survey to check treatment preference. According to the survey, 85% or higher rate of patients and also the caregiver, over 70% of caregiver who are taking care of pediatric patients preferred PiaSky over existing treatments. We believe that convenience provided by subcutaneous injection form and a reduction in burden are evaluated highly by patients and its caregivers. We plan to file a submission for approval in Japan, U.S., and Europe within this year. We will continue our development activity so that we can provide this new treatment option to this rare and severe disease, which is aHUS. Next, I will be talking about the shared status of DONQ52. DONQ52 is a multispecific antibody, which is an in-house project developed by us targeting celiac disease patients. Through our go and no-go scheme, we accelerated the development speed. Currently, we are holding a phase II-A study in U.S., Australia, and New Zealand. Prevalence of this disease is about 1%, and there is no treatment available, so we expect to contribute to this segment of patients suffering from celiac disease. As for phase I-A/B study, phase I-C study, we are considering publishing the data, announcing the data in academic congresses. Lastly, this is our submission schedule. The projects with a blue star are newly added projects, and projects with green stars are the projects where we changed the submission timing, planning timing. Divarasib, second-line non-small cell lung cancer. Based on this project status, progress of the project, we accelerated the filing timing from 2027 to 2026. As well inavolisib, we now have a timeline for regulatory filing for endocrine therapy-resistant breast cancer. Also, based on the progress of the project, we changed application timing for endocrine therapy-sensitive breast cancer patients from 2028 - 2029. In 2026, we have the record high number of submission planning, but the progress so far is pretty good. We expect that we bring new treatment options to patients as soon as possible. Subsequent slides are for your reference, so please refer to the subsequent slides. That concludes my presentation. Thank you. Next, Mr. Taniguchi will provide an overview of the consolidated financial results for the second quarter of FY 2026. We'll pause briefly at the beginning, so please use this opportunity if you'd like to take a screen capture. Okay, let's get started. This is Taniguchi speaking. Now I want to discuss the financial results for the second quarter of FY 2026. First, I would like to report that the revenue for the first half came to JPY 663.3 billion, an increase of JPY 84.8 billion, or 14.7% year-on-year. Core operating profit was JPY 329.1 billion, an increase of JPY 57.1 billion, or 21% year-on-year. Now I'll walk you through the details in sequence. Starting with revenue, as I just mentioned. Product sales came to JPY 566.5 billion, an increase of JPY 55.1 billion, or 10.8% year-on-year. By region, domestic sales came to JPY 237.9 billion, an increase of JPY 14.6 billion, or 6.5% year-on-year. Strong performance by new and mainstay products more than offset the impact of NHI drug price revisions and generic penetration. Overseas sales came to JPY 328.6 billion, an increase of JPY 40.5 billion, or 14.1% year-on-year, reflecting continued strong exports of mainstay products to Roche. Other revenue came to JPY 96.8 billion, an increase of JPY 29.8 billion year-on-year. This significant increase reflected higher one-time income and royalty income from Roche and third parties. I will now move on to the cost items. Cost of sales came to JPY 195.9 billion, an increase of JPY 20.7 billion, or 11.8% year-on-year. The increase in absolute terms mainly reflected the significant growth in product sales. The cost to sales ratio increased by 0.3 percentage points year-on-year to 34.6%, mainly due to changes in the product mix. R&D expenses increased by JPY 3.9 billion year-on-year to JPY 90.2 billion, reflecting steady progress in drug discovery and early-stage development projects. SG expenses increased by JPY 3.6 billion year-on-year to JPY 49 billion. This was mainly due to higher promotional expenses for new products such as Lenvrimab and ELEVIDYS in the first quarter, as well as increases in enterprise taxes and bonus accruals linked to profit levels. As a result, operating profit increased by JPY 57.1 billion, or 21% year-on-year, to JPY 329.1 billion, while the operating margin rose by 2.6 percentage points to 49.6%. Finally, net income after tax came to JPY 238.4 billion, an increase of JPY 44.9 billion or 23.2% year-on-year, partly reflecting an improvement in net financial income and higher interest rates. The next slide shows the breakdown of changes in product sales. First, at the bottom, domestic sales, which is in dark blue, the oncology area came to JPY 117.4 billion, an increase of JPY 0.8 billion or 0.7% year-over-year. In terms of breakdown, the new product, Lenvrimab, recorded higher sales, while plerixafor also increased following the approval in March of its combination therapy with Lenvrimab. Sales of Phesgo also increased steadily, more than offsetting the decline in pralsetinib. Meanwhile, Avastin continued to decline due to the impact of NHI drug price revisions and generic penetration. Sales in a specialty area came to JPY 120.5 billion, an increase of JPY 13.8 billion or 12.9% year-on-year. In addition to the mainstay products Hemlibra and Vabysmo, the new product ELEVIDYS also continued to grow steadily. Overseas product sales came to JPY 328.6 billion, an increase of JPY 40.5 billion or 14.1% year-on-year, driven by a significant increase in Hemlibra sales. The next slide shows the breakdown of the increase in operating profit. Starting from the left, for domestic sales, the significant increase in sales volume more than offset the impact of NHI drug price revisions and contributed positively to operating profit. For overseas sales, the increase in volume significantly exceeded a decline in export unit prices. Together with the positive foreign exchange impact, this contributed to the increase in operating profit as expected. Other revenue also contributed positively to profit, reflecting an increase in royalty income from NEMLUVIO. We also began recognizing royalty income from Foundayo. Cost of sales, as I mentioned earlier, increased to some extent, reflecting the increase in product sales. Just for your reference, the next slide shows the quarterly trends in cost items in operating profit. The trends for every three months. The next slide shows a quarterly trend in the components of revenue compared to the previous year second quarter or compared to the previous first quarter. For the overseas sales, quarterly results tend to fluctuate to some extent, due to timing differences in revenue recognition arising from timing of export shipments and other factors. On this slide, we are showing our progress as of the end of the second quarter against the full-year forecast announced with our financial results in January. Both revenue and profit are showing higher progress rates than in the same period last year. For the pharmaceutical business, we tend to see bigger sales to come in the latter half of the year in general, but currently we are getting close to 50% progress rate right now, even for the operating profit. We are going quite strong this year compared to last year. Next slide. This slide demonstrates progress against initial forecast by segment and product. Compared to the previous year, well, as you can see, sales progress is higher in most of the main products. This page demonstrates the impact from foreign exchange rate as usual. Comparing with last year's actual rate, there was a positive impact of JPY 26.9 billion on revenue and JPY 19.8 billion on operating profit. If you compare this against Swiss Franc, actual conversion rate shifted from JPY 171.31 - JPY 183.39. It's about JPY 12 weaker compared to the previous year, which impacted positively on the performance. Next, this is financial positioning. Well, as a total asset is JPY 3 trillion 449.9 billion, which is down JPY 18.7 billion. This is due to reduced net working capital, and also there was a special payout of a special dividend. That reduced cash, that decreased total asset slightly. However, if you look at net assets, the total equity exceeded the payout of dividend. There was an increase by about JPY 20 billion when it comes to net assets. As a result, the equity ratio was 82.8%. There was an increase. Net cash compared to JPY 979.7 billion. Now there was a decrease of JPY 17.1 billion and now net cash is JPY 962.6 billion. Well, accumulation of cash is progressing well. However, because of the payout of taxes and so on, there was a reduction by JPY 17.1 billion. This is the non-core adjustment as usual. The amortization, depreciation of intangible assets, and also business rebuilding costs are excluded from the IFRS performance. Lastly, this is the major plans for major investment and status of each initiative. That's all from me. Thank you very much. Thank you for your attention. Now we'll move on to the Q&A session. We will have Mr. Hidaka, Executive Vice President in charge of sales, will be also present and to respond to Q&A sessions. To allow as many participants as possible to ask questions, we kindly ask that each person limit their questions to two. Please note the audio of your questions, together with the presentations, will be posted on our website at a later date. We'll first take questions from those participating in person, followed by questions from participants joining via Zoom webinar. If you have a question here at the venue, please raise your hand. A microphone will be brought to you. Please state your company name and your name before asking your question. The first in the front. This is Hidemaru from Citigroup. Thank you very much for explanation. My first question, maybe you don't have an answer to this question, but I need to ask you this about Foundayo. Sales hasn't really started to contribute to your business, but I'm sure it's starting, including from Q2. I'm sure you had your original prediction or forecast for the full year. Far, compared to your forecast, is there anything you can comment on the progress or the current status? That's my first question. Thank you very much for your question. Exactly, Foundayo sales will be basically handled by Eli Lilly. I hope you can ask them about the sales status. Overall, not just Foundayo, but as explained earlier, during this first half, looking at the status during the first half, we are making a good progress, particular progress. That means for this fiscal year forecast, we believe we are able to accomplish the full year forecast for overall company. Anything to be added? I think that answers the question. Thank you very much. My second question, I know this is specific question. sparsentan was applied, I think this is proceeding in domestic. I think you had a very high expectation, can you comment on its potential in the domestic market on this? Thank you very much for the question. sparsentan. Currently in IgA nephropathy, there are many different drugs available. Endosialin mechanical drug, atrasentan, or iptacopan, and also APRIL antibody. There are multiple new treatment drugs under development right now. Sparsentan, you can take once a day on an oral format, and you are able to show the renal reduction in protein, and that is quite effective. Endosialin and also it's utilized so we can reach out to the patient who's not getting enough effect in existing treatment, and this can also protect the renal functions as well. It is quite convenient and has a great effectiveness. That's why there is a high expectation compared to other drugs available. I think you come in earlier than the others, you should be able to maybe get much bigger share in the market. We have already applied for approval, so I hope we can get this delivered to the patients as early as possible so we can get bigger penetration in the market. This is Hidaka from sales. This is the renal area, which we haven't really been in the market for a while, as explained by Kusano. It has a very high potential, so we can well permeate throughout the market. I hope you can also have your expectation for this drug as well. Thank you very much. Thank you so much. Okay, going to the next person, next to the first person. Please go ahead. This is Kazuaki from Daiwa Securities. The first question is royalty and profit share revenue. In the appendix, there was a split breakdown with revenue from Roche. The first quarter revenue, excluding Roche revenue, JPY 4.1 billion. Second quarter, it was also JPY 4.1 billion. The revenue for NEMLUVIO was announced by Galderma. Compared to the first quarter, there was an increase in the second quarter. Foundayo, you started to recognize the revenue from second quarter. Despite of that, there were no change in the numbers between quarter one and quarter two. Could you share reasons behind this? Breakdown of the revenue is not to be disclosed. We don't disclose the split. I ask for your understanding. This is a royalty revenue, as you know. We have a tiered agreement with partners, and then the rate might change quarter by quarter. NEMLUVIO relatively progress really well, and then this was in plan. Okay. The rate might change in a tiered basis. If that's the case, that might increase the number in quarter two compared to quarter one. From quarter one to quarter two, excluding Roche revenue, you said January to March, JPY 4 billion, and then second quarter it's about JPY 8.2, correct? For the calculation, how we calculate this value, we don't disclose any method of calculation. I ask for your understanding. I ask this question, while comparing three months to three months, JPY 4.1 billion and JPY 4.1 billion, and then I wonder if there was no difference between them. For many different reasons, we didn't make changes to the number. I understand. The second question is that your policy on allocation on your resource, on study, and also reorganization, the establishment of a Strategic Investment Department. The capital allocation policy, as you explained, I think stayed the same. Why did you think the establishment of this new department, Strategic Investment Department, was necessary? Could you give us some explanation on why you established this new department? My next question is that what do you expect to see from establishing this new department? What can we expect from this division, new department? Thank you for the question. TOP I 2030 started in 2021, and then in TOP I 2030, there were three key drivers. One of them is open innovation. Open innovation, we really think in-house projects are very important. Of course, we do collaborate with academia, but we really think it is important to establish modality platform for drug discovery in-house to develop innovative medicines. We have seen success in these initiatives. Looking around chemical, digital, then we see a lot of innovations in different areas. We think that we need to expand our views, collaborating not only with academia, but also with bio ventures, for example, to generate new value. That is something that we have been working on. As part of this, we established Chugai Venture Fund, CVC, and also, in the beginning of this year, Chugai Partnering U.S. Office was set up in the U.S., and it is in action already. As we work on this open innovation, we considered in-licensing, co-developing, co-licensing, and so on. However, we think that we need to make one step forward. That is the reason behind the establishment of department. For example, by conducting M&A, we acquire technology, and combining this new technology with our in-house technology, we could provide something new. Also, by collaborating with companies that have a target identification technology, we believe that we can deliver new value. The other element is the change in our financial positioning. As our CFO mentioned, we have accumulated cash. How to utilize, how to effectively leverage this accumulated net cash has been a theme or a question, I would say, internally. By leveraging this accumulated cash, we can increase our value. Also, by introducing assets, we believe that we can accelerate our growth. That is why we established this new department, Strategic Investment Department, to strengthen these initiatives. Thank you very much. That is all from me. Okay, next question. Ozaki from Nihon Keizai Shimbun. I think you have mentioned at the beginning the number of applications. You are planning to have the highest number of applications being filed this year. At the end of last year, since then, looking at your presentation materials, the number has been changing slightly. According to the latest number, how many are you planning for this year? Ozaki-san, thank you very much for your question. Please take a look at the zabuton chart. Where it says under application, there are nine items, and the first one left top, that is application in the U.S., and this is not that we file. It is not us who file this. We exclude them. Currently eight are filed. In 2026, going down, and we are expecting eight more being prepared. Looking at domestic market, I think we can go up to 16. At the beginning of the year, we mentioned 15, I think. But now we are adding this green item, divarasib, second-line small cell lung cancer. We actually accelerated this into this year instead of next year. At the beginning of the year, we mentioned 15, but now it is 16. Thank you. Let me confirm. Tecentrinq, at the end of last year, I think it was already filed, wasn't it? Tecentriq for the bladder cancer? Oh, maybe different indication, I guess. Let me check then. Thank you. Another question is Medicare and the NHI price is being introduced, I guess. What is the impact on this? Can you repeat the question? In FDA. It was difficult to listen to your question. Can you hear me okay? Okay. In the U.S., MFN price, drug price issue. The forced introduction into Medicare. MFN introduced to Medicare, I think that is in the plan. What is the impact of that? What do you think will be the impact? The U.S. is leading this international reference pricing. I believe you're talking about it. It's very uncertain when it comes to its forecast. Under such environment, what we are doing is we are trying to deliver the innovative drugs over to patients in a continuous manner. Meaning the situations are not really fixed right now, confirmed at this point. Depending on situation, there are many different stakeholders, of course, the Ministry of Health, Labour and Welfare as well, also the Patients Association, not just Ministry of Health, Labour and Welfare. We need to have dialogue with all these different stakeholders in order to deliver innovative drugs over to the market, and we want to continue making efforts. Thank you. Thank you for your answer. The person behind him. Go ahead, please. My name is Ueda from Goldman Sachs Japan Co., Ltd. My first question is NXT007 and its phase III study. Well, in global phase III study, there was a head-to-head comparison with Hemlibra. Do you seek to achieve superiority or dosing frequency or device convenience, or do you think you can promote switching with this convenience and dosing frequency? Could you share the more background behind this NXT007 project? NXT007. Yes, thank you very much for your question. In two studies, we started dosing. One is comparison with Hemlibra, the other is comparison with factor VIII. What was announced about this phase III study is that the number of cases, 360 for the comparison with Hemlibra and 126 for comparison with factor VIII. While superiority or inferiority, at this moment, we have not disclosed this information. Dosing frequency, that has to do with our strategy. At this moment, we don't disclose this information. I ask for your understanding. By the way, about the device. It says drug device combination. Are you considering something like auto-injector? Auto-injector with higher convenience. Yes, we started the study with auto-injector. Thank you very much. My second question is the progress of cost of sales. If you look at the quarterly number, it seems that the cost of sales has increased. Export of Hemlibra and also product mix might be impacting this. Do you have any cause for increased cost of sales? Is it exchange rate change? I will hand this question to CFO. Yes. To put it simply, it's because of product mix change. Overall, as sales from developing countries increase, cost of sales will increase. It's product mix and the geographic mix, but it's just 0.3%, I appreciate it if you could have a long-term view to look at the annual number of COGS. Thank you very much. That's all from me. All right, next question then. Wako from JPMorgan. My first question is about export sales. Everything is going pretty much in line with the plan, as you mentioned, Hemlibra, Actemra, and also NEMLUVIO included in the others. This is according to the results by Roche and Galderma. I think we were able to confirm very strong progress so far, and you're also showing a good progress rate in your performance. Seems like somewhat stronger than expected, but what is the actual situation? Thank you for the question. In a nutshell, making very good progress so far. For exporting, it's not the level out amount on a monthly basis. Towards the end of the year, we also order supply for six months or so. It's been going quite stable right now. It's not there yet to be able to make any revision to our business performance at this point. We're making good progress. In your plan, you don't really make revisions to your forecast. I know it's quite natural, but compared to the plan, you are going stronger than the plan. What do you mean by making good progress so far? In the first half, the first six months is going as expected. Slightly better than expected? I see. Thank you. Second question. AQUA07. The non-approved data Fast Track, I thought it was rare. What type of data Fast Track that you'd got and phase I design, I think this is a combination use of the lorlatinib, is the reason why this lorlatinib is selected. Looking at the data so far, lorlatinib could be also reasonable choice. I just wonder why. Wako-san, AQUA07 question. Thank you very much for your question. For non-clinical situation, we got Fast Track designation, we are very happy to get this designation. According to data we submitted, we use AQUA07 or ALK-resistant impact, and also existing ALK inhibitor combination impact, non-clinical data was provided. Non-clinical data is to be disclosed as an appropriate timing. As explained today, there is a new MA, and that was also appreciated, understood well, I think. Next, phase I clinical study. Why Alecensa not being utilized. This is also due to somewhat strategic reasons. First, we want to start a combination use of lorlatinib, but in the future, ATP, ALK TKI, including Alecensa, will be pursued. We will create more data to allow that to happen. Thank you. Thank you. Next person, go ahead. My name is Miyuki from Yakuji Keizai magazine. I have a question about page 17. Projects under filing and then projects you plan to file. sparsentan is in purple. This is the third-party technology, and then I think it's rare for you to file an application for those in-licensed products. Is it a special case for you, or do you plan to increase those types of filing? Let me answer this question. I talked about capital allocation policy earlier. Assets in Japan. Introduce assets and also acquire assets for the Japanese market is one of our strategies. sparsentan type of filing, developed products, and then also if we see attractive products, we plan to acquire, in-license those products. That's part of our strategy, capital allocation strategy. Thank you. Understood. One more question. Sorry, I didn't study much. On 27 page, the SIGMART progress is 124%. Why do you think this is? Could you share the reason for this? The progress. Yes, let me answer this question. SIGMART. In China, there are many things ongoing, like changes in reimbursement system. Originally, we were conservative about price change, and then some of them are pushed back. Delayed. That's why the actual were higher than our focus in the beginning of the term. For long term, I think we will be overall on plan. However, for short term, we see strong positive here. Thank you very much. The second from the front row, please. Shimomura from Nikkan Kogyo. ELEVIDYS, the progress. How do you view the progress at this point? ELEVIDYS progress to be explained by Hidaka-san. Let me answer to your question. This is Hidaka. Regarding ELEVIDYS, in total, things are making good progress according to the plan, especially there is an age restriction. First, this year, for those who are coming to eight years old, will be prioritized to make sure they would not miss any treatment opportunities. We'll consider dosing those patients first. By the end of the year, things are moving as planned pretty much. Institutions now, so they'll be the first case to be starting one after another. I think we are making good progress so far. Another question about the R&D, ELEVIDYS R&D. There's a testing in ambulatory patients. The application will be for 2028. There is no change, is that correct, for that timing? Can you bring out the tile chart regarding this ambulatory capability for ELEVIDYS? 29, sorry, 29. The right top. Shimomura-san, thank you for your question. Non-ambulatory indication, as you mentioned, currently still on hold. Still continue this study. That is why it's set at 2029 and beyond. For the ambulatory indication for EU, we have not got the approval yet. We continue to discuss with the regulatory authority for the new ambulatory global phase III is to be starting right now. That is in the plan. Thank you. Thank you. Any other questions from the floor? Please raise your hands if you have a question. Now we will take questions from online participants joining Zoom webinar. For those who are using Zoom webinar, using your laptop or tablet, please use raise hand function. When we will ask you to ask a question, the admin staff will ask you to unmute yourself. Please state your name and affiliation before you ask a question. If you cancel your question, please delete your raise function. Then we will call your name, so please state your name and affiliation. If you're joining from the phone, if you want to cancel your question, please push star five. The first question, Muraoka-san from Morgan Stanley, please. Yes, thank you for this opportunity. This is Muraoka from Morgan Stanley. Do you hear me okay? Yes. I have a question about NEMLUVIO. Well, I don't need too much of a detail. However, I'm still wondering, I don't have any visibility, but why loyalty value was flat, I didn't quite understand. Also the export volume comparing the first quarter and the second quarter. If you compare these three months, well, we saw a decline. I was wondering why. Were there any specific special transaction? If you said that there was a special transaction, I can understand, but I don't understand why. It will make it difficult for me to develop a story going forward. Could you elaborate on this point? Thank you very much for the question. Basically, the local sales reported by Galderma and our export volume do not align all the time because based on the binding commitment, we export and sell products to Galderma, but it's not in parallel with local sales made by Galderma. Galderma, they consider what's their safety inventory, appropriate inventory, and then they make their purchase plan based on their strategy. These two things don't usually align. I ask for your understanding. Understand. It's not that their inventory level is very low. Are you aware? We don't hear anything, but what we do is based on the request for import, based on the shipment strategy, we will meet their demands and request and export our products. We don't know how much is their inventory level. Understand. Thank you. The other thing is, DONQ52. We now entered phase II-A which is good news. It has been four years since we started phase I. I think this project is taking a long time. I think everybody thinks so. Can you explain why it took as long as four years? Do you think that we can expect that this will accelerate from this point? Let me understand how to interpret this trial. Thank you very much for your question on DONQ52. As you know, celiac disease, there is no investigational drug approved for the indication of celiac disease. This is a completely new disease area, so we took time to complete phase I. In addition to that, as we reported the other day, gluten challenge. This is to intentionally give gluten to a patient, so this was a very challenging study. This is a new area, and then this study is being conducted outside of Japan, so that is why it may have taken longer time. However, as I said today, now we entered phase II- A, and then we believe that we can accelerate the process going forward. Specifically, this project targeting celiac disease, Dr. Dan Leffler, who is a renowned immunologist, we invited this doctor. He is an incumbent immunologist, clinical immunologist, so he sees patients, and then he supports this study as well. Please, I expect that this will accelerate going forward. Thank you. In the next phase, after 2029, in the timeline, DON is here. Does that mean that you expect to enter phase III in 2028? What is your expected timeline? Thank you for the question. At this moment, it depends on the result of phase II- A, currently ongoing. We are not aggressive when we make this plan, but once we see the data result, I am sure that the subsequent study will be accelerated. We would like to make sure that we confirm proof of concept as soon as possible. Thank you very much. That is all from me. The next question from UBS Securities, Seki-san, please. Seki from UBS. Thank you for your explanation. Regarding capital allocation, I have two questions. First question, your stock price has been declining slightly, so is it possible for you to conduct share buybacks? It is not if you intend to do it, I am asking if it is possible to conduct share buybacks. Depending on such a restriction, for example, from the market and Roche, you buyback to have the same ratio, would that be possible? Have you assessed that possibility? That would be my first question. Seki-san, thank you for your question. This is Taniguchi speaking. If it's possible or not, it is possible, I believe, but of course, there are many stakeholders, and we need to find the best return to the shareholders. We need to have such a comprehensive review to decide, and that's why we decided to go ahead with a special dividend this time. We also had a 45% payout ratio as part of the common dividend, ordinary dividend, and that's what we are proposing. It is possible technically, but as mentioned earlier, the ratio of floating stocks in our TSE is also monitored, and based on the condition, we chose the most realistic option by providing a special dividend. Thank you very much. This Strategic Investment Department that was newly built, it's very unlikely to assume purchasing the pipelines as is. I think it's going to be a technical technology that you'll be purchasing. How much are you looking at in terms of size? If it's a great quality technology, can you actually go for maybe a few hundred billion JPY to be spent? Regarding the size, depending on the cash level of being accumulated and also the cash needed to sustain business operations, based on those conditions, we have certain assumption of the investment amount. At this point, we're not able to share specific numbers. Thank you. Thank you for the question. Next, from Macquarie Capital, Tony Ren, please. Hi, Tony Ren from Macquarie. Thank you for taking my questions. My first question is about your Vabysmo sales. Yesterday, Roche reported a fairly, I'll say, modest Vabysmo sales, right? In Japan, your Vabysmo sales grew 25.8%, right, in the first half of this year. Can you explain why this drug is doing so much better in Japan compared to what Roche reported? Yeah, that's my first question. Thank you. Domestic Vabysmo sales, I will have Mr. Hidaka to explain about that, but this is under Roche responsibility. Outside of Japan sales, which is under Roche responsibility, we do not make a comment. Let me make a comment about the Japanese market. It has been three years since the product was launched. Last year in May, prefilled cylinders was launched, and that really accelerated the sales. Especially indication is RVO. For RVO, Vabysmo is used much more than we had initially expected. That is why domestic sales has been going quite well. At this moment, as of June, we have a market share of over 30%. We would like to make sure that Vabysmo's future benefits will be well-communicated to doctors. Okay. Very good. I would like to ask you about your AQUA07, again, the allosteric ALK inhibitor. My understanding is that in the front line, you are looking to combine it towards lorlatinib, right? Can you comment on the toxicity profile? Lorlatinib has a bit of toxicity, right? Higher cholesterol level, some CNS toxicity. Have you seen any toxicity of your AQUA07 that you think would contribute to additive toxicity? Tony Ren, thank you very much for your question about AQUA07. At this moment, looking at the non-clinical test study result, both as a single therapy or as a combination therapy, we have not identified any serious side effects, however, adverse events. However, we need to administer this drug to a patient to see what might be a risk. We will conduct a study to confirm the efficacy and toxicity, both as a single therapy and also as a combination therapy. Okay. Understood. Yeah. Thank you very much. Thank you. Sanford C. Bernstein Securities. Sogei-san, please. Thank you. NXT007. You're talking about this will be the future growth driver. Where are you looking at the growth driver target businesses? Sorry, I wasn't able to hear your question clearly. Can you hear me okay? Where the business is coming from to drive the growth. I want to hear your view on that. Let me explain the background of this question. I think I get what you want. Understood. Thank you. Just according to our guest, well, we have Hemlibra having a quite large share. With NXT007, phase III to be successful once we get approval to be launched, what would be the positioning of this NXT007? I think that was the question. The sales, and whether that can actually also boost the overall contribute to the sales. Depending on the patients, some patients could be good with Hemlibra, may not be able to get a good result with the Hemlibra. Also with the patient with high activity who needs much stronger drugs, could be actually switching from Hemlibra. Also at the same time, it is currently true to the situation, but there are many patients who are really satisfied with Hemlibra. If you look at them in total, so the sales of Hemlibra, certain patients will be switching over to NXT007. If NXT007 is going to be the incremental sales, in addition, we can expect some incremental sales. That's why we consider that as a growth driver. Yes, that's what I meant. Also, the switching from Hemlibra, when that happens, meaning the NXT007 is slightly higher in price. Is that because of that higher price? It doesn't really make sense to switch because of the higher price. The price is higher when you switch to this NXT007. That can be a growth, additional revenue of sales. Let me explain this. Hemlibra, having a quite large share already. Switching from this existing share, and there are those patients who continue on Hemlibra, and those patients who hasn't used Hemlibra, and factor VIII preparation patients, there are several kinds. They may start using NXT007 or maybe Hemlibra. Those are the options. There could be new patients, and there are switching patients from Hemlibra. Those will be increasing in total in terms of number of patients. Understood. Okay. Switching to NXT007 from Hemlibra, can that be considered as a growth? Talking about the price, at this point, it's very difficult to make any comment about the price. If this can be a growth or not, we don't know yet. At least, the sales would not be declining. That's what we are forecasting right now. I see. My second question, AQUA07. ALK-positive non-small cell lung cancer. There are pretty good drugs available which are providing clinical benefits to patients right now. Now we are talking about this ALK inhibitor, allosteric inhibitor, it's going to be introduced, which is different from what's available right now. What is the strategy? Adjuvant or the first-line, if you use this, if the lorlatinib is utilized in the second line by having a combined therapy, so by extending the treatment period of the second line to maximize the commercial value of this product, is that the right understanding? Sogei-san. Thank you very much for question on AQUA07. For this AQUA07, this is for first-line and second-line. In either treatment, we can expect better results and effect. For the first line, the combination treatment is considered. The connecting location, the inhibitors are utilized in the different locations. If we combine them together, those treatments, so the emergence of the resistance change can be actually suppressed. Compared to the existing drug, PFS would be longer, probably, and that is farther longer PFS than the current first-line that is available. That's one strength. The second line, it's going to be on single treatment. The current ALK inhibitor, they are pretty good drug available, but still, you tend to have a resistance, as well. This is the first time to actually act on non-ATP pocket area, different location. If this really works well with the existing drug for those patients who got a resistance to the existing drug, this AQUA07 can actually generate enough effect by single use. That's why we can see the improved efficacy both on first line and second line. I understand very well. Thank you very much. Thank you. Next from Nihon Keizai Shimbun, Ms. Nakada, please. Ms. Nakada, do you hear me? Yes. Ms. Nakada. Do you hear me okay? Yes. From Nihon Keizai Shimbun, my name is Nakada. Your performance, the impact of foreign currency exchange rate, I would like to ask impact. Weaker yen, higher dollars are progressing, what you see impact, how much do you see an impact on weak yen? What do you think is an appropriate exchange rate? Thank you for the question. CFO will answer the question. Systemically, weaker yen, both in terms of revenue and profit, have a positive impact, as you see on this slide. Recently, yen was weaker against Swiss franc. That have made a positive impact on our performance. Long-term perspective, what will happen, if there is any ideal exchange rate. To that question, we are not in the position to answer this question. I hope that this clarifies your question. Thank you. Understood. Next from SMBC Nikko Securities, Wada-san, please. This is Wada from SMBC Nikko Securities. Thank you for taking my questions. I have a question about AQUA07. Once again, going back to AQUA07. The first line, with the allosteric inhibitor, we have Scemblix and asciminib. These are used for the first line. They started with the second line, they're now utilized on the first line in single use. Can you once again talk about the first line? You're talking about combination therapy, and would that be also a single use also considered in the future beyond the sorry, for the first-line therapy? Thank you very much for asking a question on AQUA07. For the first line, single use drug is also effective, I believe. As I mentioned earlier, we think a combination therapy would be better because it can reach a different location. You can approach to a different location. Comprehensively, we can actually awaken the mechanism to generate resistance on each location. Different approaches utilized by using this combination therapy, I think it would be considered better. Of course, single drug is okay, but with the combination, we have this assumption of having longer PFS. ATP connection point can be the area which can actually change a lot. With the allosteric AQUA07 connection point, do you have any study tested to tend to have mutations at that location? It's possible to have resistance at this location for AQUA07, but how much resistance is generated is we still don't have the end result. We want to confirm through the clinical studies. Thank you very much. Another question, DONQ52. If it's possible, I think, I believe you are looking at licensing out this, what is the possibility and what is the current status of negotiation of licensing out this drug? DONQ52 question. Thank you very much. For specific project, whether to license in or out, we want to refrain from commenting on that. Currently, we are conducting phase II-A study, and we want to complete this properly. Based on the result, we want to start looking at where to license out. Thank you. Thank you so much. Okay, we have covered all the questions. Now we will conclude question- and- answer session. Thank you. With that, we will conclude quarter two 2022 financial performance announcement meeting. For questions that were not answered, please contact our Corporate Communications IR department. In the last page of the presentation slide, you have the phone number and our email address. Thank you very much again for your time and participation. That concludes the session.