Astellas Pharma Inc

TSE:4503

Earnings Call Transcript 2023-Q3

[Hiromitsu "Hiro" Ikeda, executive]

Everyone, thank you very much for your participation of this announcement of the financial result in the FY '22 third quarter. I'm Ikeda from Advocacy and Relations serving as the moderator for today.

Before starting the financial results announcement, we would like to make some explanation about the Astellas announcement of a change of present CEO at the -- announced at the 11:30. And [indiscernible] is going to make the opening remarks, first of all. That is followed by the explanation by the appointed President as of April 1, Okamura.

[Kenji Yasukawa, executive]

Hello. I'm Yasukawa. I would like to thank you for your joining. At the Board of Directors meeting held today, we decided to appoint Mr. Naoki Okamura, our CEO, effective April 1.

I would like to start by saying thank you for your kind attention. I'd like to begin by explaining the background behind this change in CEO. Astellas has been working on its corporate strategic plan 2018 and the corporate strategic plan 2021.

Since the fiscal year 2018 when myself was appointed as President and CEO, to realize its vision on the forefront of health care change to turn innovative science into value for patients. During this time, Astellas overcame the patent cliff associated with the expiration of products exclusivity that has supported its growth in the past, and revenue has stand upward trend after bottoming out in fiscal year 2020.

In addition, Astellas moved away from its past business model of creating products with a focus on specific disease areas and promoted a shift to the focus area approach of determining R&D areas. From a modified perspective, it's also making progress in developing new drug candidates that will drive future revenues.

Fiscal year 2023 is the right time to go on the aggressive to further accelerate growth, and Naoki Okamura will take over as new President and CEO as well as decided it is best for it to consider and implement strategies for achieving CSP '21, which ends in fiscal year 2025 and long-term growth beyond that under the new leadership.

The environment surrounding the company is changing rapidly, such as increasing geopolitical risks and the changes in the finances and the markets of each country due to the COVID-19 crisis. But the new top management has the ability to be flexible in response to such changes.

Since joining the company in 1986, Mr. Okamura has served as the Head of the Business Development and Corporate Planning. In 2018, he became CSTO. And from fiscal 2019, he participated in management as Representative Director and Vice-President, overseeing a wide range of business units and driving the business forward.

In addition, he provides leadership in setting direction for organizational health goals and promoting the reorganization of R&D.

In a highly uncertain business environment, he's not bound by stereotypes or pretty [indiscernible] . But he's also be able -- he's also able to make decisions with a bird's eye view of the entire Astellas organization free from stereotypes.

He places great importance on direct dialogue with employees, always speaking to them in his own words and sincerely listening to their voices. He's both logical and passionate, strict and warm, serious and humorous and has own the trust many people within the company. I will assume the position of Representative Director and the Chairman of the Board. I will fulfill the roles not for management execution, but management the decision-making and the supervision of business execution to ensure that Astellas moves in the right direction to meet the expectations and demands of its stakeholders. I will also focus on advocacy activities to let the public know by what value the pharmaceutical industry brings and how it contributes to society. We look forward to your continued support. Thank you very much.

[Hiromitsu "Hiro" Ikeda, executive]

Yasukawa , thank you very much. Next, Okamura, please.

[Naoki Okamura, executive]

As of April 1, I'm going to serve as the Representative Director, President and CEO. I am Okamura.

In 2016, I was appointed as the Head of Corporate Planning for 7 years since I am proud that I was at the center of strategic development and its implementation at Astellas. So being able to assume my responsibility in this way is a great honor for me.

We are now at a turning point in here for CSP 2021. But in a bigger framework, there's no change in the priorities raised as a strategic organizational health and performance goals. I'm going to continue the management policy and the direction of the business in principle.

But if you look at each individual goal, the business environment and the progress of the project are changing every day. So I will maintain principles and reorganize priorities flexibly so that we can allocate limited management resources appropriately.

I'd like to solidify the sustainable growth after LOE of enzalutamide and XTANDI, and my mission is to hand over to the next leader by doing so.

As is shown in Vision and CSP 2021, Astellas is aiming to be cutting-edge value-driven life science innovator. So creating innovations continuously is our lifeline. So we should learn from our mistakes and failures, take wise risks so that each one of the employees can demonstrate leadership. There is a need to further foster the corporate culture aiming for a higher level as one Astellas, and we would raise ambitious goals to do our best to achieve the goals, but we'd like to be an outcome-driven company.

Astellas is working on the generation of medicines to improve the root cause of the diseases substantially, like cell therapy and gene therapies going into the unknown areas, entails business risks, but we give little priority to safety for the patients with a sense of urgency that patients are waiting.

We'd like to stir the company with a sense of speed. So we appreciate your continued support and guidance for the future. Thank you very much.

From here, we would like to start 2022 fiscal year, the third quarter financial results announcement. For this announcement, Zoom webinar and live streaming are available, but the questions are accepted only through Zoom webinar not from live streaming.

Today, including Q&A, Japanese and English simultaneous translation is available for those participating through Zoom webinar from the screen of Zoom play select your favor language. But when it comes to simultaneous interpretation, we, as a company, do not guarantee the accuracy of that.

The participants for today. On top of Yasukawa and Okamura, we have Minoru Kikuoka, CFO; Yukio Matsui, CCO; Yoshitsugu Shitaka, Chief Scientific Officer; and Tadaaki Taniguchi, Chief Medical Officer.

We have 4 in addition, and the presentation material is available on the website. So please refer to it. The material or presentation by representatives for the company and answers and statements by them in the Q&A session includes forward-looking statements based on the assumption and beliefs in light of the information currently available to management and subject to significant risks and uncertainties. Actual financial results may differ materially and depending on a number of factors. They contain information on pharmaceuticals, including compounds under development, but this information is not intended to make any representation, advertisement or medical advice.

Now please start Kikuoka.

[Minoru Kikuoka, executive]

Hello, everyone. I'm Minoru Kikuoka, CFO at Astellas Pharma, Inc. Thank you very much for joining our FY 2022 third quarter financial results announcement meeting out of your very busy schedule today.

This is a cautionary statement regarding forward-looking information shown on Page 2. This was explained by Ikeda earlier, I'm going to skip this page.

This is the agenda for today. I will cover these topics in this order from the next page. Page 4 is an overview of FY 2022 third quarter financial results. Revenue and profit increased in the third quarter. Revenue increased 17% year-on-year and was in line with our full-year forecast revised upward in the second quarter.

Sales of XTANDI and strategic products were on track globally. Sales of XTANDI in the United States were in line with our full year forecast, which was revised downward in the second quarter. Sales in Japan and Europe also progressed in line with our full year forecast.

Sales of PADCEV were in line with our full year forecast, which was right upward in the second quarter.

Let me explain the details of each product on Page 6 and Page 7. Next on cost items. Cost of sales ratio was as expected. SG&A expenses were on track and decreased year-on-year when Forex impact was excluded.

On the expenses, we're on track. As a result, core operating profit increased by 6% year-on-year, in line with our full year forecast. Full basis operating profit was below our full year forecast due to the booking as other expenses of foreign exchange loss caused mainly by the robust depreciation against the euro and yen's rapid depreciation against the dollar from JPY 150 level to the JPY 120 level in just 2 months in the third quarter.

On Page 5, I will explain FY 2022 third quarter financial results. Revenue increased to JPY 1,164.4 billion, up 17.3% year-on-year. The progress against the full year forecast was 76.2%. Core operating profit was JPY 233.7 billion, up by 6.2% year-on-year. The progress was 80.6% above of our full year forecast.

You can see the Forex impact on the right-hand side of the table. Revenue increased even when Forex impact was excluded. On the other hand, core operating profit decreased when excluding the Forex impact. This is partly due to the booking of JPY 24.1 billion gain on divestiture of intangible assets in the third quarter of FY 2021.

The bottom half of this page shows full basis results. In the right bottom of the table, we included other expenses booked so far. In the first quarter, we booked impairment losses on intangible assets in the gene therapy programs and increased fair value of contingent consideration related to fezolinetant.

Also, due to the booking of net foreign exchange losses of JPY 6.7 billion in the third quarter, net foreign exchange gains and losses risen by JPY 20.6 billion compared to the second quarter. As for a positive event, Xyphos fair value of contingent consideration increased by JPY 4 billion as we reviewed the development plan for Xyphos-derived initial stage program. As a result, operating profit was JPY 181.3 billion, up by 7% year-on-year, progressing at 67.4% of our full year forecast.

Profit increased to JPY 144.8 billion, up 9.3% year-on-year. The progress was 69.6% of our full year forecast.

On Page 6, let me explain the third quarter results and the future outlook of XTANDI. First, global sales reached JPY 511.9 billion in the third quarter, up by 24% year-on-year and up by 8% when Forex impact was excluded. Global sales are in line with the full year forecast revised in the second quarter.

Regarding the future outlook, XTANDI is expected to meet our full year forecast in all regions.

Globally, as a whole, we're expecting near double-digit growth. Even excluding Forex impact, XTANDI is expected to achieve big sales of JPY 670 billion in our full year forecast.

Next, let me explain the current situation and the future outlook for each region. In the United States, third quarter sales reached $1.972 billion, growing by 2% year-on-year. This 2% is the growth rate on a local currency basis. Performance is in line with our full year forecast revised downward in the second quarter. Market conditions remained challenging as we included this factor in our forecast.

Levels of Patient Assistance Program or PAP ratio and share of Zytiga generic competitors continue be high. New patient starts have not returned to pre-COVID-19 levels. On the other hand, we don't see any worsening of the situation compared to assumptions reviewed in the second quarter. So we are expecting the achievement of full year forecast of over $260 million. Top line results are expected in the fourth quarter for the future growth driver in M0 CSPC indication from embark study, with which we are aiming to obtain the additional indication. This is expected to drive the growth trend after approval.

Next, in established markets. Performance is in line with our full year forecast revised significantly upward in the second quarter, contributing the most to global sales increase. In terms of the volume, M1 CSPC continues to grow, especially in Germany, Italy and Canada, contributing to strong demand increase by 22% year-on-year.

As of now, we don't see any clear impact of Zytiga generic competitors. So we are expecting the achievement of our full year forecast. By the way, commercial segment of Australia was changed from established markets to international markets in the third quarter. These closed numbers already reflect this change and actual results of the same period in the previous fiscal year and forecast figures are slightly changed.

Also in Japan, performance is in line with the full year forecast revised upward in the second quarter.

Market share expanded in all approved indications, maintaining #1 share. In Greater China, performance looks strong, but this is due to shipment timing. When this factor is excluded, performance is almost in line with our full year forecast.

In international markets, performance looks strong due to the Forex impact, particularly from the ruble, but in line with our full year forecast, excluding this factor. There are some regional differences, but globally as a whole, we continue to expect growth in the next fiscal year as well.

On Page 7, let me explain our strategic products. First about PADCEV. Global sales were JPY 33.1 billion, in line with our full year forecast revised upward in the second quarter. Strong performance in Europe is expected to offset a slightly underachieving performance of the United States, resulting in our expectations to achieve the full year forecast.

In the United States, the active business is progressing in line with our assumptions and PADCEV is growing steadily. On the other hand, revenue from clinical trial orders are below expectations. Taking this impact into consideration, we anticipate landing slightly behind our full year forecast.

We have already acquired a high market share. In the current indication, we're expecting significant sales growth after the approval of the additional indication in the first-line setting. We hope this will be a growth driver in the next fiscal year and beyond.

In established markets, led by Germany, market penetration is exceeding our expectations. Performance is also exceeding our full year forecast revised upward in the second quarter. Furthermore, PADCEV was launched in 4 more countries compared to the second quarter, in a total of 20 countries. reimbursement started in 5 countries.

We're expecting our upside from our full year forecast and further growth into the future. In Japan, progress is in line with our full year forecast to revise significantly upward in the second quarter. New patient start to continues to show a strong trend and market share is expanding steadily. We're expecting that in line with our full year forecast.

In international markets, PADCEV was launched in Singapore in July and in UAE in December last year. We're expecting PADCEV to be launched in more countries in the future, hoping it will contribute to sales. Once again, the key to further growth globally in the future will be the expansion of the current indications and the additional first-line indication.

Starting with the approval anticipated in the United States in the next fiscal year, we are hoping for significant sales growth.

With regards to XOSPATA, sales are increasing in all regions where it's launched. The actual business is growing steadily. Performance looks strong, but this is mainly due to high inventory level in the United States, assuming the leveling of the inventory level in the fourth quarter. XOSPATA is expected to meet our full year forecast.

For Evrenzo, performance is below expectations even against the downwardly revised full year forecast. Although launch and reimbursement are progressing in Europe, it is slower than expected. Reimbursement was obtained in France in December. We are expecting reimbursement also in Italy and Spain. In the near future, we are hoping for sales contribution.

On Page 8, I will explain cost items. Cost of sales increased by 16.5% year-on-year, along with revenue increase. COGS ratio was down by 0.1 percentage point year-on-year to reach 19.4% in line with our expectations.

SG&A costs, excluding XTANDI U.S. co-promotion fees, increased by 11.8% year-on-year. When Forex impact was excluded, SG&A expenses decreased by 1.1% or JPY 3.4 billion year-on-year. The ratio to revenue decreased by 1.4 percentage points year-on-year to 28.6%. The progress against our full year forecast was 73% under full control, in line with our full year forecast.

Personnel costs fell by about JPY 8 billion year-on-year with global optimization of commercial-related personnel. We are trying to reduce sales promotion costs related to mature products, such as mirabegron, which decreased the cost by about JPY 6 billion year-on-year.

On the other hand, we are making active investments for new product launch readiness for PADCEV and fezolinetant. Sales promotion expenses rose by about JPY 8 billion year-on-year. We will continue to allocate our resources to strategic products with higher priorities.

R&D expenditure increased by 16% year-on-year, but by 3.1% when Forex impact was excluded. The main reason for this is the booking of onetime expense of JPY 13.8 billion for using a priority review voucher, PRV, in the first quarter for the application of fezolinetant.

Excluding these costs, R&D expenditure decreased year-on-year. Ratio to revenue was 17.7%, down by 0.2 percentage points year-on-year. The progress against the full year forecast was 74.1% in line with our full year forecast, including the use of PRV for fezolinetant.

On a full basis, we booked net foreign exchange losses of JPY 6.7 billion of other expenses. Net foreign exchange gains were JPY 13.9 billion as of the second quarter, but we booked net foreign exchange losses as expenses, mainly due to the impact of the depreciation of the ruble [indiscernible] for about JPY 10 billion. And the impact of the yen's appreciation against to the U.S. dollar for about JPY 9 billion. The net foreign exchange gains and losses worsened by JPY 20.6 billion from the second quarter.

Unlike the Forex impact to occur from a special factor elimination of unrealized profit, excluding the impact from the second quarter, we can say this is the most difficult Forex impact occurred due to adjustment based on the year-end rate for claims and debt denominating foreign currency, which accounted as nonoperating items according to the Japanese according standards.

This time, a relatively big impact occurred because not only for the yen against the dollar, but also for the ruble because of an impact not only from sales amount in ruble, but also from the relatively long payment period for receivables nominating ruble on the special circumstance these days. When the Forex doesn't move much, there is almost no impact on gains and losses. But when it fluctuates a lot, there was a big depreciation of the ruble in December, then there can be a huge impact to occur like this time. So for the future, we'd like to consider countermeasures more than before to appropriately manage the impact of Forex fluctuations.

However, regarding the ruble, which caused a huge impact in the third quarter, I don't go into the details, but there are seasonal factors and special factors as well. Also in the fourth quarter, claims denominated in rubles are expected to remain high in value. So we will work to shrink the exposure for the future as much as possible as Forex hedge costs are high for these currencies.

I'd like to explain the outlook for FY '22 full year on Page 9. First, on a core basis, we expect revenue and core OP to be in line with our full year forecast. Therefore, our full year forecast remain unchanged and our core OP focus also remain unchanged at JPY 290 billion.

On the other hand, we have revised downward our full year profit forecast. As explained earlier, we booked a net foreign exchange loss of JPY 6.7 billion. And a fair value contingent consideration due to review of development plans for Xyphos-derived program, which totaled JPY 4 billion in other expenses in the third quarter.

In addition, recent to the announced in the press release, ZOLBETUXIMAB met its primary endpoint in Phase III studies. And if we make decisions for regulatory submission globally in the fourth quarter, we expect to recognize the fair value increase of contingent consideration that is over JPY 40 billion as other expenses in fourth quarter.

The same is true for Xyphos-derived development program, but the increase in the fair value of the contingent consideration reflects positive development progress for the business.

The full basis, profit has been revised downward, primarily to reflect these events. Operating profit on a full year basis is expected to be JPY 195 billion, a decrease of JPY 74 billion from the previous forecast of JPY 269 billion. And profit is expected to be JPY 150 billion, down JPY 58 billion from the previous focus JPY 208 billion.

In addition to the forementioned events, which are incorporated in this forecast, although not shown on the slide, I would like to explain a few other events that may occur in the fourth quarter and beyond.

First, I would like to discuss the possibility of booking and impairment loss on intangible assets of Evrenzo. The amount of the impairment loss is now being incorporated in the forecast for FY '22 full year because it is still undetermined and difficult to estimate the specific amount at this time.

The company is currently in the process of obtaining reimbursement for Evrenzo in Europe and it plans to revise its future focus in the fourth quarter, taking into consideration the sales in each country. Depending on the outcome of this review, Evrenzo may record an impairment loss on intangible assets. In addition, other events are currently under scrutiny to optimize the appropriate cost structure, looking ahead to FY '24 and '25 in order to achieve the CSP.

At this time, we are still in the study stage and have now incorporated the cost to be incurred through this optimization in our forecast for FY '22, but we may book onetime costs in the future. Again, we haven't incorporated these factors into our full year focus because they are uncertain at this moment. However, we have shared these 2 information in advance as they may impact the full basis profit level if they are booked. This expectation of the FY '22 third quarter results and our outlook for the future.

Now I'd like to explain the initiatives for sustainable growth. Page 11 is about XTANDI and strategic products. Key events expected in FY '22 will be explained. In December, the filing to the FDA was completed for PADCEV for additional indication of first-line locally advanced metastatic urothelial cancer who are not eligible for cisplatin. This submission received the priority review designation and a target date of April 21, 2023 for completion of review.

As shown on the bottom of the slide, other updates include the ongoing Phase III EV-302 study for the global submission for the first-line urothelial cancer completed enrollment in November, and top line results are expected in 2023.

In addition, the EV-202 study, evaluating the efficacy and safety of ZOLBETUXIMAB in other solid tumors, completed enrollment of all patients in November. And initial data is expected to be disclosed in the first half of 2023.

Next, for ZOLBETUXIMAB, we received top line results from 2 Phase III trials in November and December. Details will be explained in the next slide. For AT132, we submitted our initial response to the FDA regarding the clinical hold in the third quarter of this year. And we are still in ongoing discussions with the agency. Details will be explained later again.

Page 12 is about the latest status of ZOLBETUXIMAB. We have top line results from 2 Phase III studies, SPOTLIGHT and GLOW studies. The SPOTLIGHT study evaluated the efficacy and safety of ZOLBETUXIMAB, in combination with mFOLFOX6, a chemotherapy regimen used primarily in the United States and Europe. And GLOW evaluated the efficacy and safety of ZOLBETUXIMAB in combination with CAPOX , a chemotherapy regimen used primarily in Asia.

In both studies, ZOLBETUXIMAB demonstrated statistically significant improvements versus placebo in both the primary end point of PFS and the primary secondary endpoint of OS. As we introduced the details of the SPOTLIGHT study at the recent IR meeting, we presented the results at the ASCO GI meeting in January.

As show in the lower right figure, the combination therapy, where ZOLBETUXIMAB and mFOLFOX6 resulted in long OS over 18 months. [indiscernible], this data was highly evaluated and accepted the ASCO GI.

Based on the results of both studies, we are working for a regulatory submission globally and targeting the first BLA submission in the first half of fiscal '23. In addition, activities are underway to raise awareness of the importance of Claudin, 18.2. The drugs target as a biomarker in preparation for its launch.

The combination diagnostics -- excuse me, the companion diagnostics needed for patient screening will be marketed by our partner, Ventana, in conjunction with the timing of marketing of ZOLBETUXIMAB.

From here, Page 13, I would like to talk about our focus approach. As for current status of projects and clinical trial, those that made progress in the past quarter are shown in red. In the genetic regulation, the FDA's clinical hold on AT845 was lifted in January that it is explained on the next slide.

In the area of bispecific immune cell engager in immuno-oncology, ASP1002 has entered the clinical stage and is scheduled to start Phase I trials in the fourth quarter. The details of the type molecule are not disclosed at this time, but we still introduce them at an appropriate time in the future.

This is the third project using bispecific antibodies to interclinical trials following ASP2138, which is a position as a successor to ZOLBETUXIMAB and ASP2074 announced in the previous fiscal results announcement. Based on the focus area approach concept, projects have been continuously generated.

On Page 14, we describe the progress of the genetic regulation programs, AT845 and AT132, to what is the resumption of their respective clinical studies. In AT845, we received a clinical hold from the FDA in June 2022, as has been mentioned already. But we submitted a response in December based on which the clinical hold was lifted in January.

The protocol will be modified to reduce the risk of similar adverse events before resuming clinical trials. One is to exclude but distant with the history of or risk factors with neuropathy. And the other is to reinforce the safety monitoring products. We are currently working on the necessary procedures for resumption of dosing with a target resumption date of second of FY 2023.

Regarding AT132, its initial response to the clinical hold given by FDA on September 2021 was submitted in the third quarter of the current fiscal year. We have had constructive discussions with the U.S. and the European authorities, and we plan to continue to do discussions with them in the fourth quarter. We will update our overall plan based on feedback from the authorities. But at this point, we expect to resume dosing in FY 2024 or later.

On Page 15, I will explain our collaboration with the Selecta Biosciences in relation to the progress of AT845. First, on the left side of the slide, I will explain about pre-existing immunity, or PEI.

A certain percentage of people have naturally acquired IgG antibodies that react to adeno-associated virus, or AAV. It is difficult to expect such individuals to benefit from gene therapy using AAV capsids science. And they exclude it from the eligibility criteria in clinical trials. it cannot receive treatment.

An estimate that -- it is estimated that up to 30% of adults have acquired antibodies to AAV8 using AT845.

As shown on the right side of the slide, aiming at dealing with this issue, Selecta has created a IdeXork and IgG protease that is specifically and efficiently cleaves to human IgG. There are other IgG protease under development by other companies, but most of them are derived from human pathogen. So many patients are considered to have antibodies against AAV.

Xork, on the other hand, it's not derived from human pathogens and it is expected to have local cross-reactivity to pre-existing antibodies in human serum, which attenuate the efficacy. Astellas would have the sole and exclusive right to commercialize Xork for use with investigational AT845 in Pompe disease. Through this collaboration, Astellas expects to expand the patient population for AT845.

On Page 16, I summarize the progress made in the third quarter toward the achievement of CSP2021. In the upper left hand corner, revenue from XTANDI and Strategic products are showing progress in line with the revised full year forecast. The U.S. -- sBLA for PADCEV for the first-line treatment of metastatic urothelial cancer, an important growth driver for since been accepted and It was designated as prior review.

For ZOLBETUXIMAB, we obtained top line results in 2 Phase III studies, both of which met their primary endpoints.

In the focus area approach on the left bottom, progress was made on AT845, including the lifting of the clinical hold and the new collaboration. In addition, one new immuno-oncology project entered in the clinical phase. In terms of core OP, while securing proactive investments for new product launches, continued efforts to thoroughly review cost has been made. As a result of G&A expenses, excluding the impact of foreign exchange, was down year-on-year.

In the lower right-hand corner, although I did not explain it today, with respect to sustainability, we have revised our greenhouse gas emission reduction targets and have received approval from the SBT initiative. The details will be explained at the sustainability meeting to be held this month.

In addition, again, although not shown on the slide, as announced in the press release today, we have decided to acquire our own shares. The share will be up to 29 million shares to JPY 50 billion, and we conducted from February 7 through March 24. We'll continue our efforts to improve the capital efficiency and shareholder return.

Page 17, this is the last slide. This is a schedule for upcoming events. We are planning to hold a sustainability meeting on February 17. We want to do in-depth initiatives that are unique to Astellas and that are of great interest to investment community.

We are also considering holding a meeting on fezolinetant after it is approved. It is expected to be around March, but we will inform you of the details as soon as they are determined.

And to summarize, in the third quarter, the basis of the core business is in line with forecast. But when it comes to business of a full basis, due to the expected matters, including the foreign exchange change loss against the ruble, It went down. But this is considered to be a tentative situation.

For the full year, our core business has been forecast. And for the full base business, again, due to the impact of the currency and also the progress of the [indiscernible], which are all positive for us, there's likely to be a downward shift.

With the value review of Evrenzo and also further optimization of our cost structure, we believe that these are going to work for our corporate strength.

That's all. Thank you very much. That's all for the presentation.

[Hiromitsu "Hiro" Ikeda, executive]

We now would like to entertain questions from the audience. You can ask questions only through Zoom webinar. If you have a question, at the bottom of the Zoom screen, you can find your raise hand button, so please press it.

If you're joining from smartphone, if you tap the details, you'll see the raise hand button, so please tap it. The [ MC ] is going to name you. So please unmute yourself on your screen; mention your name and affiliation, and then ask questions.

Thank you for waiting. First, Credit Suisse Securities, Mr. Sakai, please.

[Fumiyoshi Sakai, analyst]

Sakai from Credit Suisse Securities. I have 2 simple questions. First, today, there was no update? Scan, what is the current status right now? You overcame patent cliff, as was mentioned. But as for the Scan, it's not against my expectations, but it turns the product with quite a big size. So I'd like to know.

Another question is about XTANDI in the United States? My concern is as follows: pre-pandemic levels of the patient -- new patient starts have not returned to the pre-COVID-19 pandemic level. Is this because of the competition against generics having an impact? Or there's going to be an additional indication for the future. So you mentioned there's going to be a further growth in the next fiscal year and beyond. So I'd like you to explain the situation of the XTANDI in the United States once again. So those are my 2 questions.

[Unknown Executive]

Thank you very much. Regarding your first question, I'd like to respond. And the second question will be explained by Matsui, CCO.

As for Lexiscan, right now, in the [ lawsuit ], we applied for the extension of the petition up to the 31st of March, we received the extension. Regarding the impact on the current fiscal year, it's going to be quite limited. But in the next fiscal year and beyond, we have to closely monitor the situation. In that respect, in the current fiscal year, there's a smaller likelihood of a decrease in sales. As for the XTANDI, Matsui is going to explain.

[Yukio Matsui, executive]

Mr. Sakai, thank you very much for your question. Matsui speaking. As for XTANDI, it's not just about our company, but the diagnosis of cancer for new patients. In the United States, companies doing active business in oncology area, you might have heard from them, there is no complete recovery yet. The number of new patients is facing the delayed diagnosis.

As for the impact of the generics, there is some impact of generics. But as we mentioned before, in terms of the volume, it's growing. And in FY '23 and beyond, there's going to be a gradual recovery in our view. EMBARK study for the additional indication would be coming in the entire market. What's negatively working is the new patient starts and PAP, P-A-P.

Comparing FY 2021 and '22, just likely there is still some impact of PAP even more than the previous fiscal year, but we included this in our budget formation. So revised forecast -- this is in [indiscernible] revised forecast. The ratio is similar to the revised forecast right now. And new patient starts and the -- together with the economic recovery, there's going to be further recovery, then we can see a further increase in the new patient starts.

[Unknown Executive]

Let me make one confirmation. [indiscernible] for Lexiscan. Other than what's been presented, there Is no new sort of topic. In the next fiscal year, generic injunction, you go into -- the generic entering the market. That is also what you have in your mind as the risk or there is a situation with the hospital. So currently, we are behind. So in that respect, including risk launch, certain risk has to be incorporated in the next fiscal year. However, litigation is still ongoing. That specific number is something I would like to refrain from making comment.

[Hiromitsu "Hiro" Ikeda, executive]

And today, Yasukawa and Okamura are still here. Of course, this is the financial announcement meeting. However, if there are any questions, we are ready to answer them as well from them. Citigroup Securities, Mr. Yamaguchi, please.

[Hidemaru Yamaguchi, analyst]

City, Yamaguchi is my name. Can you hear me?

[Unknown Executive]

Yes.

[Hidemaru Yamaguchi, analyst]

Next fiscal year, well, [ the President ] will be changed, I don't think this is directly related to it, but has a [indiscernible] next fiscal year and afterwards. That is extremely important for your growth in the midterm plan. In the previous meeting, I think you mentioned that from next fiscal year, these products are likely to be further expanded in a bigger. Of course, final approval is not really given, and I've heard that the March, you are going to give us the -- some explanation. So how do you view about the next fiscal year and afterwards? Are you thinking -- looking towards making this product big so that it could be the business driving [ cost ] for you? Would you please make a comment about this?

[Unknown Executive]

Well, this is a good question made. So Matsui is going to give you the comment.

[Yukio Matsui, executive]

Thank you very much for your pointing out. Just you mentioned the final approval hasn't been given to us, so we need to wait for that. However so far, information giving activities for this product. In other words, this is awareness activities being continuously ongoing. And in the United States, the doctors and also consumers are highly reacted to our information that is more than expected. So in that way, so that we can make this product bigger. We are [ honestly working ] for the effort.

[Hidemaru Yamaguchi, analyst]

One more question. This may be related to the change of the present and CEO, as Dr. Yasukawa mentioned, particularly from the global [indiscernible], that's a big change of your strategy looking from outside. But looking at the pipeline you explained, I'm sure you are heading into this direction overall. But you have to go into this direction for the future. But right now, you are aiming for this. You are making a transformation and a few years past since the shift, how this is perceived internally? And including the results you are achieving externally, I think your direction is not wrong, but what is your comment on this?

[Kenji Yasukawa, executive]

Yasukawa speaking. If you look at our initiatives in 2013, it's around 9 years since we are working on this. This strategy was incorporated in CSP in 2018 -- by around 2018. In this way, we wanted to create the backbone of the company, and we became confident about it.

From that time, during inclusion and exclusion, sometimes 5 or 6, we continue to develop primary focuses. Initially, one by one was kind of independent. But in the past 1 or 2 years, cell differentiation and cultural technologies can be used in Immuno-Oncologies. And gene editing technologies can be used in other areas as well. So we think there was a lot of development in this respect.

And also, on the other hand, because of the impact of COVID-19, it's not just for Astellas, but also broadly for the entire pharmaceutical industry. Pre-POC clinical studies from the priority for each study site, it was postponed and deferred, we couldn't see progress as we expected.

And cells or genes in recent years, [indiscernible] or analytical technologies also made progress. [ Very detailed ] issues we couldn't recognize before are now visible because we can see those issues. We have to ensure the safety of the patients and the issues and impurities or abnormalities, which are now visible. If there are some issues with the cells or empty capsids, such technical issues are being improved. As for small molecule studies, with the specification studies with FDA and other regulators, we reached agreement with them. That is the past year or so. We made progress. But as I mentioned before, we couldn't achieve POC. That's a regret in my tenure.

[Hiromitsu "Hiro" Ikeda, executive]

Next, Daiwa Securities, Mr. Hashiguchi, please.

[Kazuaki Hashiguchi, analyst]

Hashiguchi speaking. There are a couple of questions. The first question, the end of the [indiscernible] the possibility of additional cost to -- after reviewing the cost structure, Mr. Kikuoka, you mentioned, if there is some distortion or situation happens, you are trying to fill that gap. And in FY '24 and '25, you mentioned some explanation, but the issue considered this time.

Well, the FY '25 profit target is difficult to be achieved -- is considered in that way. So in order to fill the gap you are trying to do those countermeasures this time? Or in order to add further profit on FY '25, you are trying to introduce such activities?

[Minoru Kikuoka, executive]

Thank you very much for your question. What I mentioned is that, well, for the number wise, it's still [ on the stage ] that we are not able to disclose any specific numbers. But before me joining this company, included for various perspectives. So for example, the [indiscernible] globalization so that you actively invested so that the efficiency can be further improved. You prepared the setting for that. And for the go live of the product, there is increase of the cost sometimes. However, it seems that, that is starting to be offset. We've made investment beforehand. But thanks to that, we started to offset [ of that ]. And there are some area that is [ overlapping ]. So we want to make it further efficient. We are working for the various activities. But especially after I became CFO, we look at the whole debt perspective in a thorough review approach.

Well, the situation is not particularly difficult compared to the past. But in order to secure the formal result from what we've been making as an effort, just like the Yasukawa mentioned, we would like to grow further. And for the purpose -- so that we can allocate our investment to the strategic area further, we want to increase the efficiency further.

In that perspective, for the expenses, well, we are going to come into the details now until the future, but not really booked in FY '22, and it will be probably after FY '24 because in FY '22 and '23, we would like to verify the situation and so that we can prepare for FY '24, where we expect larger expenses.

[Kazuaki Hashiguchi, analyst]

Secondly, about zolbetuximab. In R&D expenditure, you booked costs for the increase of the commercial production. This time, you are submitting your filing -- you have an outlook for filing, so it's going to be deducted from R&D expenditure. And when you [ acquire ] fezolinetant, with regards to the acquisition of [ Ogeda ], there was a conditional consideration. If you can obtain the approval by mid-February, another possibility of reviewing the fair value again?

[Unknown Executive]

Yes, you're right. Regarding zolbetuximab, I talked about the contingent consideration only, but by doing this, what we are booking in the R&D expenditure would be seen as product they would be shifted to the inventory. So we are going to book them as assets. We are assuming that possibility. So my answer to the first question is, yes.

As for fezolinetant, there's already a change to the fair value. We are not expecting a further change to the fair value. Zolbetuximab R&D expenditure would be affected. Even including that factor, it's not going to be an impact to affect or have a gap on a full year forecast. Because of the shift in conversion, JPY 6 billion as a short-term profit we are expecting.

[Kazuaki Hashiguchi, analyst]

Lastly, Xyphos collaboration. Again, the contingent consideration, and there's a positive revisit for the development plan. Could you be specific about that? What actually happened? If it is possible, would you please share that information with us as well?

[Unknown Executive]

Sorry, it's not a collaboration. It's about the acquisition. Sorry about that. [ IR ] is going to give you the answer.

[Unknown Executive]

Program is a preclinical stage. So detailed programs haven't been really disclosed. But we visit the study development plan and value went up. And that is Xyphos-derived product. That was disclosed.

[Hiromitsu "Hiro" Ikeda, executive]

Next, Mr. Kohtani from Nomura Securities.

[Motoya Kohtani, analyst]

Kohtani from Nomura Securities, can you hear me?

[Unknown Executive]

Yes.

[Motoya Kohtani, analyst]

First, about Evrenzo. In the end -- I'm sorry to go into the past, but Repatha, Linzess, and if your outlook with [ existing ] products, you tend to make a mistake or you tend to be wrong. As for Evrenzo, what was your expectations? What was not achieved? Could you elaborate on that once again, to clarify?

So that's not going to apply to fezolinetant at all. If you don't say that, regarding the accuracy of your forecast, we still have some doubtful question I would like you to clarify. That's my first question.

[Unknown Executive]

On this point, Matsui, CCO, is going to respond.

[Yukio Matsui, executive]

Mr. Kohtani, thank you for your question. Thank you for your very tough comments. We take it seriously. Regarding Evrenzo, what was different in our forecast. This is an oral agent for CKD-induced anemia which can be treated with an oral agent. According to our market research, we found strong [indiscernible]. But in reality, intent to use, asking doctors whether they have intention to use. They do have strong interest.

If you look at the response from the physicians on this point, because of the strong comments, [indiscernible] would expand more rapidly. We thought that we can maintain a high market share as a company to enter into this market ahead of the competitors. But unfortunately, in our experience in Japan, in the field of nephrology and treatment of anemia, the health care policies are very complicated in a variety of frameworks. From the government -- it's strictly controlled by the government. So switching from the existing treatments, it's not going to be changed so quickly based on the speed we assumed. We think that's the reason for our wrong forecast.

What's the difference compared to fezolinetant? In the case of Evrenzo, it was doctors' selection. But as for fezolinetant, particularly in the United States, as you know, consumers themselves to be highly engaged in the selection of this drug. In the United States, as we mentioned a bit, fezolinetant and vasomotor symptoms for fezolinetant regarding this disease, there are very strong unmet medical needs and patients themselves are strongly interested in this drug, particularly for the first half year, we felt it strongly.

You may know this, but for example, if you search on the internet, recently, CBS News spent 5 months to show how women are struggling to advance into society and how much burden they are suffering. There was a talk program for about 5 minutes on CBS. This may be coincidence, but Michelle Obama, the wife of the former President Barack Obama, also commented on this disease on the Internet. And Oprah, she is a very popular MC in the United States. And she's also mentioned this disease recently.

Regarding this disease and the drug in the field, patients and women's interest are very high. CKD treatment is more specialized on [ HPC ]. As a decision-maker have a higher proportion, but in the case of fezolinetant patients, particularly in the United States, have a big say in the decision-making process. And they have a very high awareness and interest level right now as we observed. So in this sense, we are very confident about fezolinetant that we can grow this to a big product. That's our belief.

[Unknown Executive]

So sorry, I was in other companies meeting as well. What you just mentioned is also included within the handout material. No, maybe. [indiscernible] in the material. Oprah Winfrey, Michelle Obama. Those have a very strong voice to the female -- of all the American females. Well, they are not directly talking about fezolinetant, but they are talking about this disease [indiscernible] activities are related [ to talks ] made by them, right?

[Motoya Kohtani, analyst]

Yes, that's right. I think that is a very worthy information to be put on to the material. Now about the [indiscernible]. The relation of the fair value, it seems that it's larger than expected. So this number is a big surprise for you? Or the pancreatic cancer is also included? That's why the number goes in this way?

[Unknown Executive]

Well, basically, as for the monetary amount has been really discussed with the partner, that's why the number is seemingly bigger than we've expected. But in the countries where we are aiming at the submission -- and further considering the relationship, we come up with a disappropriate estimate of the possibility of submission as well to come to this number. So this is in line with our assumption as well. But in this fourth quarter, if this really happens or not? Well, in the beginning of the fiscal year, our assumption is, yes, it will be the next fiscal year. So in that perspective, guidance wise, this is my, look, very sudden information from your perspective.

However, when -- from the beginning, we are saying that if we come to that kind of situation, then fair value change will be triggered. That is already in our mind. But looking at this couple of months, we believe that the accuracy and the possibility of the submission goes up. So it is likely to be within this fiscal year.

[Motoya Kohtani, analyst]

In Europe, this year, this is going to be a year of the clawback. This year, in France, clawback sales of pharmaceuticals would be regained with excess. And VPAS is rising in U.K. as well. So in Europe, the risk of reduced revenue, what's your view on this? This is my last question.

[Unknown Executive]

This is related to sales and marketing. So Matsui is going to explain.

[Yukio Matsui, executive]

Thank you for the question. You are -- you know the details. VPAS in U.K., 5% in 2021 as the ratio, 5% in 2021; '22, 15%; 2023, 26.5% in the fiscal year 2023, which is a big burden. In France, as you pointed out, unfortunately, [indiscernible] introduced such a system, 5% tax increase in Germany as well, XTANDI and [indiscernible] products growth affected by this greatly. And we are including this in our outlook.

In France and other countries, innovation and social security access, they are trying to keep a good balance between the 2. In that sense, VPAS clawback depending on the economic conditions can change a lot. So not only for us, but also for the industry association, are we going to appeal to each country?

For us, as you pointed out, regarding the 3 countries you mentioned, we are factoring the same as a risk in our forecast. And they have not established yet. They are still under discussions. Somewhere during this year, they are going to be established? No. Regarding those 3 countries, starting from January, it's already being applied.

[Hiromitsu "Hiro" Ikeda, executive]

Next, Morgan Stanley, MUFG Securities, Mr. Muraoka, please.

[Shinichiro Muraoka, analyst]

I'm Muraoka from Morgan Stanley. Now the first question, it's about this midterm plan. You mentioned about the word of flexibility, and there are so many index, and there are so many items that you need to look at. However, out of those, I think there are some particular numbers that you definitely like to stick to 8% revenue [indiscernible] 30% or something like that. Are there anything specific that you would like to particularly stick to achieve.

[Unknown Executive]

Thank you very much for the question. If I answer all the numbers, that will be the answer. But if you would say which out of those all? So of course, the sales of the revenue has to increase otherwise, so we cannot gain their profit for reinvestment. So definitely, I would like to -- we would like to increase the revenue.

In a Core OP percentage, 30%. That itself is no goal. This is the -- just assumption for the future and saying 30%. So this is -- definitely have to achieve. This is a must percentage that we need to achieve. But as we mentioned, rather than thinking about FY '25, but my mission is that -- and so there might pattern expiry still, we can continuously grow ourselves. That is what we have to prepare now. Of course, revenue and profit are both important.

But from a focus area approach, we have the product that gives us a profit. That is something I would like to stick to. This JPY 500 billion for the 2023. Well, we have to think about that carefully. But the final view that I have is 2021, [ 5 where ] that we need to see the [ road ] of the growth further. Otherwise, we cannot say that we achieved 2021 CSP.

[Shinichiro Muraoka, analyst]

Another question to Mr. Okamura to confirm. Last year, I think it was at the time of the second quarter results, Dr. [ Yasukawa ] talked about fezolinetant in the initial year. They meet dozens of billions of yen to be achieved. Unfortunately, in the market, there is some doubt. And I'd like to ask Mr. Okamura to explain this in your own words regarding the numbers mentioned by Dr. [ Okamura ].

[Unknown Executive]

That's also my belief. How much we explained in our own words repeatedly, the products are going to sell well or there are prescriptions. We have to show evidence on data to you. We're already in such a stage. So Yasukawa and I are kind of united. So we are going to believe this -- believe in this and we are going to show it to you.

[Hiromitsu "Hiro" Ikeda, executive]

[indiscernible], Morgan Stanley Securities. [indiscernible] please?

[Unknown Analyst]

[indiscernible] speaking. Can you hear me?

[Unknown Executive]

Yes.

[Unknown Analyst]

There are 2 questions. First, fezolinetant. So the disease awareness activities are ongoing, that you mentioned, what is the specific activities? What kind of media are you using? Would you please explain about that?

Relating to that, fourth quarter pre-launch cost or expenses that is included within the planned expenses that currently you have as a number?

[Unknown Executive]

Regarding the expenses, let me answer the second question by myself. And the first question will be answered by Matsui.

What you mentioned is probably the cost booking for the launch. That is already incorporated within our financial plan. And for the marketing activities, Matsui is going to answer.

[Yukio Matsui, executive]

As has been mentioned, the patient HCPs for both [ hot flash ] and such symptom challenges. Those are covered by our disease awareness activities. We use TikTok, we use [ SMS ], e-mails. We utilize a lot of different media.

Of course, depending -- of course, those 45 to 65 year old female, that is the target for this drug, and we are considering the most appropriate media for such a generation depending on the situation or may do the fine-tuning to make it effective.

[Unknown Analyst]

Secondly, about AT845, the -- adding the protocol or change. When Xork is going to be available, as is shown on Page 15, there's going to be an increase in the patient population. How should we see the increase or decrease in the patient population? There are some patient subjects to be enrolled with some limitation. But if Xork is going to be available, you can expand the patient population regarding AT845?

[Unknown Executive]

On this matter, Taniguchi joining remotely overseas is going to explain.

[Tadaaki Taniguchi, executive]

Thank you for your question. I would like to explain AT845. As we explained earlier, from FDA, there was clinical hold, which is now lifted by FDA. So continuously, we will discuss with FDA. And what kind of protocol amendment is going to be necessary, we are now discussing with FDA. Patients with prior neuropathy or patient at high risk of neuropathy would be excluded from the clinical study. But then in Phase I right now, we will accumulate data.

And in the late stage development, what kind of patients would be your target? And what kind of patients should be excluded from the protocol? We are discussing right now.

We have the exclusion criteria in the protocol and those patients excluded cannot use this drug for the future. We don't know yet. That's one thing.

As for Xork, AAV patients with AAV antibody, that's around 30%. And we can make efforts to increase the population. So this is not directly linked to the protocol amendment fee we made. But using [ Xork, AAV ], because of the AAV antibody, patients were not eligible for the administration, but could be eligible. So this is separate from the protocol amendment. We'd like to make this drug available to a broader patient population into the future, we will make efforts.

[Hiromitsu "Hiro" Ikeda, executive]

Next, Goldman Sachs Securities, Mr. Ueda, please.

[Akinori Ueda, analyst]

Ueda from Goldman Sachs. Zolbetuximab, fair value increase of contingent consideration is something I would like to double check with you. In your presentation, with the submission and the probability of submission and approval and the launches increased, so this probability of success went up, but there is nothing changed about the potential or whatsoever.

[Unknown Executive]

Yes, your understanding is right.

[Akinori Ueda, analyst]

Secondly, about PADCEV sales trend. Right now -- sales are growing steadily right now, but -- this is the expansion in the current indication. After the announcement of EV-103 Cohort K, it's not used in the first line yet. So it's going to expand after you get the approval for the first-line indication?

[Unknown Executive]

As explained a bit initially, there may be some additional comments Matsui would like to add.

[Yukio Matsui, executive]

Actually, I don't have much to add, but you're right. According to our observations, off-label use is not so much in principle. In just usage in the current indication, that's the majority of sales right now, according to understanding.

[Akinori Ueda, analyst]

Third question, the collaboration with the Selecta, with [ Xork ], the efficacy is less likely to be attenuated. But for the gene therapy, do you consider about the usage of this technology for the multiple administration of gene therapy?

[Unknown Executive]

[indiscernible] is going to explain about it.

[Unknown Executive]

Thank you for the question. So [indiscernible] multiple administration might be possible, thanks to this kind of technology. But for the collaboration with the Selecta this time is only for Pompe. So IgG protease, the immunogenicity with this regard is also needed to be observed. And depending on that, there is a possibility of the multiple usage, it will be different.

[Hiromitsu "Hiro" Ikeda, executive]

Next to JPMorgan Securities, Mr. Wakao, please.

[Seiji Wakao, analyst]

Wakao from JPMorgan. My first question is about your forecast for the next fiscal year. I'd like to get a sense of your company. In February, fezolinetant may be approved. Then on a full year basis, next fiscal year, fezolinetant is going to contribute to your results. On the other hand, excluding fezolinetant in your existing business, based on the situation not until now, the existing businesses will grow. And then fezolinetant will be on top of that, but rather according to my own impression, according to my model, rather than that, the existing business may face challenges and fezolinetant growth can offset the stagnant situation of the existing businesses in my view.

So right now, what is your future outlook of the existing businesses in the next fiscal year, as a negative factor, the yen's [ appreciation ] and the stagnant growth of XTANDI and mirabegron and there can be generics of Lexiscan. And there are some impact of generics for some products. So in the existing businesses, the next fiscal year may be a challenging year. What do you think?

[Unknown Executive]

Then I'd like to explain. Right now, we are developing our budget internally for the next fiscal year. In terms of our philosophy here, in XTANDI, we reviewed in the second half. So we have to be aware of the mature phase. But still a high sales contribution is what we are expecting, XOSPATA and PADCEV. We're forecasting a steady growth and expansion. In principle, the patent cliff for the future, how to deal with this is going to be an issue. But for next fiscal year, fezolinetant will be launched. That's what we're expecting.

And regarding the existing products towards the next fiscal year, difficulties, Lexiscan, we will have a severe outlook for Lexiscan. But as a strategic product, we are expecting growth in many of them right now. So by adding fezolinetant toward 2026 and 2027, we'd like to be ready.

Second question. PADCEV first line will be approved in the April that will contribute through the year, that is likely to be the positive factor. But on the other hand, there was not much of the explanation about the mirabegron today. FORTIS [indiscernible], the competitor became available. So situation is getting tougher, I believe you mentioned that. And a dollar basis situation, if I look at that, quarter basis, quarterly basis, yes, it might be a difficult situation for you. [indiscernible] is not listed on the Medicare Part D, but from January. So mirabegron is hopefully used for Medicare Part D. So competition is highly likely to be more fierce.

[Seiji Wakao, analyst]

Now my question is that it is likely that situation is a bit fragile for you. That's worst thing. And next fiscal year and afterwards, the mirabegron sales might be negatively impacted because of this competition situation?

[Unknown Executive]

Well, Matsui is going to answer to this.

[Yukio Matsui, executive]

Before answering it, your question is only about the U.S.?

[Seiji Wakao, analyst]

U.S. market is my question.

[Yukio Matsui, executive]

I see. Regarding the U.S. market, first of all, our observation is that [indiscernible] market share is within what we expected. So far, we haven't seen any bigger impact, and we don't see that as a bigger factor causing a difficulty for us. But why this difficult situation for us? Well, market growth, that is about 2%. And our share is gradually increasing, 24.13 percentage is the current market share maintained. In this situation, why is it difficult? That's about a price pressure. That is a negative impact, and that is likely to be continued. So the competition is getting fierced and that might be what would happen in the United States. But so far in the United States, the competition of the market share with [indiscernible] is not really negatively impacting overall.

[Seiji Wakao, analyst]

Sorry, I made a mistake. Thank you very much for correcting it. It is [indiscernible].

Yes, there is an impact of the price, but the Medicare part D, if your competitor come into that [ list ], then competition is likely to be tougher. It is not happening now. But for the future, is it better to expect that will happen?

[Unknown Executive]

Well, as well so that we can do with that situation with the insurance companies, including the contracts, yes, we are working to prepare for that. We wouldn't say that the situation is further worse than what we expected, but we are doing the preparation anyway.

[Seiji Wakao, analyst]

Lastly, briefly about fezolinetant. In the second quarter, you gave us a rough amount of sales. No change since? According to initial plan, in the second quarter, you had a suggestion, we will have the numbers within that range. Should I understand this way? And also in the explanatory meeting previously, it was not approved, and the price has not been determined yet. So your strategy in detail numbers were not discussed much. But this time, at this timing, the price should be determined, and the approval may be determined. So I think that we can discuss numbers more. Can we have high expectations for the numbers as well?

[Unknown Executive]

Yasukawa responded to an earlier question. And in principle, we'd like to achieve that level, we will work on that. So in that sense, there's going to be no change. This is before the launch. So as I said at the end, in March -- as early as March, we'd like to have an expiratory meeting after the launch, where we'd like to explain the details, if possible. Thank you very much. Looking forward to that event. Thank you very much.

[Unknown Executive]

Thank you so much. We're getting the time to close this meeting. I believe that you are going to join the next other company's call. We have still many questions. But with this, we would like to close this meeting here today. Everyone, thank you very much for your participation. With this, we would like to close today's meeting. Thank you.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]