Chugai Pharmaceutical Co Ltd
TSE:4519
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Chugai Pharmaceutical Co Ltd
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Good evening. I am Itagaki. Now please take a look at Page 2 of the material. This page shows a consolidated results summary. In the third quarter, both revenues and profits increased and they set a record high performance for cumulative 9 months.
First of all revenues, JPY 426.4 billion increased by JPY 38.8 billion or 10% growth year-on-year.
Domestic sales, besides Tamiflu, though there was an impact of HIP revision, increased by JPY 0.9 billion or 0.3% due to the continued sales growth of mainstay products. Overseas sales grew by JPY 24.1 billion or 32.7%, due to the growth of Actemra and Alecensa export to Roche.
Royalties and other operation income, onetime income from 13 long-listed products' transfer to Taiho Pharma in January contributed to the growth year-on-year by JPY 14.8 billion or 64.6%.
On the cost side, cost of sales was improved due to a good progress of our own product sales by 0.9% or 50%. Also, mainly research and development expenses increased overall operating expenses by JPY 5.5 billion. As a result, both IFRS results and core results of operating profit and net profit were increased by mid-20% to 30%.
Core results. Operating profit was JPY 103.3 billion. For the first time ever, we could reach JPY 100 billion level in the third quarter. Full year OP of last year was JPY 103.2 billion. 9 months of this year, already exceeded full year of OP of last year.
Please go to the next page. In Page 3 from IFRS, International Financial Reporting Standards, noncore was adjusted to come up with core results. This time, intangible assets on OP basis was adjusted by JPY 5.3 billion. Breakdown is on the right-hand side. Amortization, JPY 0.9 billion and impaired -- or impairment JPY 4.4 billion were adjusted. In any case, at the time of licensing in onetime payment or milestone payment was made, that was posted as intangible asset in the balance sheet. After launch, amortized during a certain period of time or development was discontinued before the launch. These are considered as noncore and they were adjusted by JPY 5.3 billion. Core results are JPY 103.3 billion.
From now on, I would give my explanation based on core results. Now please go to Page 4 for financial overview. Yellow highlighted actual performance of this year versus last year.
Revenues, JPY 426.4 billion or 10% growth. 3 lines down, domestic sales, excluding Tamiflu, JPY 281.9 billion, impact of HIP revision was covered and grew by JPY 0.9 billion or 0.3%. Next line is export to Roche, JPY 84.2 billion, 38.9%, which is a big growth. Tamiflu, combining ordinary stock and government stockpiles, JPY 8.9 billion, JPY 1.1 billion decline from last year. Royalties and other operating income, JPY 37.7 billion, due to onetime income from transfer of long-listed products, and JPY 14.8 billion growth year-on-year. 3 lines down, operating expenses. JPY 128.9 billion, JPY 5.5 billion increase from last year. Operating profit, JPY 103.3 billion. OP margin, 24.2% and 31.3% growth year-on-year.
3 lines down again. Other expenses, JPY 2.1 billion, JPY 1 billion increase from last year. If you look at the right-hand side, other expenses, settlement for transfer pricing taxation was adjusted both this year and last year. JPY 1 billion was adjusted last year, because in 2016, based on the tentative agreement of authorities, expenses were adjusted. And in 2017, official agreement was made. Posted amount last year was adjusted this year by JPY 1 billion. This is why other expenses increased by JPY 1 billion this year from last year. Second line from the bottom, net income, JPY 74.6 billion or 25% growth.
Please turn to Page 5, sales excluding Tamiflu is shown. Left chart show by disease area and right chart show by product. Please take a look at the left bars first. Blue area shows overseas, JPY 24.1 billion increase of sales year-on-year. Right bars show you by product. Blue bars for overseas, Actemra, JPY 15.7 billion increase and Alecensa JPY 9.3 billion increase. Both of these numbers include positive impact of hedging due to weaker Japanese yen versus last year. 1/3 of JPY 15.7 billion increase of Actemra and 1/6 of JPY 9.3 billion increase of Alecensa is due to JPY depreciation.
Please go back to left-hand side. We have 4 disease areas for domestic. Green area at the bottom is oncology, which is negative JPY 0.2 billion from last year. If you look at each product, TECENTRIQ, third one from the top, was launched in April of this year and JPY 5 billion of sales was posted. 2 bars down, Alecensa, JPY 3 billion increase. And 2 more bars down, Avastin, JPY 1.9 billion increase of sales.
On the negative side, Rituxan, JPY 7.1 billion decline in April this year. Price was cut by 26.2% by HIP revision. Next HER2 franchise, JPY 2.3 billion decline. Breakdown is in the box at the bottom. Herceptin, JPY 4 billion decline. Again, prices cut by 20.4% by HIP revision in April. Please go back to the bar chart about Tarceva, JPY 1.2 billion in decline.
Next area is bone and joint in purple, JPY 5.3 billion increase. By product, in the middle of the right-hand side bar chart, Actemra, JPY 3.8 billion increase. And Edirol, JPY 2.3 billion increase. Renal disease in yellow, JPY 2 billion decline. There is no product listed in this slide, but Mircera or Oxarol got the price cut of 8% by HIP revision and declined sales year-on-year.
Finally, other disease area, JPY 2.1 billion decline. At the bottom of the right-hand side, HEMLIBRA was launched in May and posted JPY 1.5 billion of sales. There is no product listed on the negative side of the bar charts, but sales of long-listed product, which was transferred in January, was declined.
Please turn to Page 6, Tamiflu sales trends. Ordinary sales of last 3 months July to September was 0, therefore, JPY 8.3 billion sales of the first half was posted as sales. On the other hand, sales of government stockpiles for the last 3 months was JPY 0.4 billion and sales was JPY 0.5 billion combining first half and second half.
Please turn to Page 7. Operating profit was increased by JPY 24.6 billion from last year. Breakdown is -- please take a look at left-hand side chart with an upward arrow. Gross profit from sales, JPY 15.2 billion increase. Royalties and other operating income, JPY 14.8 billion. On the other hand, there are 3 negative factors declining sales. All of them are expenses and the JPY 5.5 billion decline in total of these 3. Breakdown is on the right-hand side.
Marketing and distribution, JPY 12 billion decline. The reason is increased volume of proportional activities, mainly for new products such as TECENTRIQ, HEMLIBRA and Gazyva, and increased expenses of European subsidiaries for which FX cannot be hedged and impacted by yen depreciation.
Research and development expenses increased by JPY 3.1 billion and made a progress of development for TECENTRIQ and other products. Finally, general and administration, JPY 1.2 billion increase. Reasons are increases of enterprise tax and legal expenses mainly.
Page 8 shows financial overview of the last 3 months. Growth trend of revenues and profits unchanged. But last 3 months, growth was less than total 9 months growth of revenues and profits. Because during 9 months, we have done Tamiflu sales and a onetime income of long-listed products transfer in the first half. But there was no such special factor for the last 3 months that make growth of the last 3 months look less. But revenues grew by 4.7%, operating profit grew by 10.9%, which is relatively good growth.
Page 9 shows the financial progress versus forecast. Revenues progress 78.7%, which is better year-on-year. Domestic progress, 75.2% is better than last year. But in the year with HIP revision, before the revision in April, product prices are higher. Therefore, progress looks better than year without HIP revision.
Export to Roche, 84.5%. This depends on shipment timing. So it is hard to compare to last year, but if you look at actual performance products, such as Actemra are growing well and contributed to a good progress. Tamiflu, already exceeded full year forecast, 158.9%. Royalties and other OP due to onetime income of transferred products made a good progress versus full year forecast. On the other hand, if you look at expenses, 71% of progress, which is bigger than last year because of increased activity volume such as research and development. Therefore, we think operating expenses will exceed JPY 181.5 billion. Operating profit progress is 95.6% now. We think we will achieve full year OP forecast at this point in time.
Page 10. This table shows sales progress and forecast by products. Domestic segment is divided into 4 areas, namely, oncology, bone and joint, renal and others. There is overseas segment as well. All in all, we are seeing higher progress rates than last year. But slightly slower progress has been observed in the following: First, progress of Alecensa was 64.8%. This is a slower rate than expectation against somewhat ambitious target, as we have explained earlier. But progress has increased significantly from a year earlier. Progress of Tarceva was 66.3%. And this was due to intense competition for share. Alaglio had 28.6%. This was affected by the slight delay in installation of equipment, which is used with Alaglio. Suvenyl was 68.7% due to fierce competition. On the right-hand side, Mircera was 70.6%, and we believe the environment surrounding us was tough, given the revision of reimbursement and amount, reducing the price of dialysis.
In overseas segment, Neutrogin progressed to 72.5% of our forecast, which we believe was due to some impacts by biosimilars. For these products, progress has been slower than expected and facing tough situation. But for other products, progress has been in line with or above forecast.
Lastly on Page 11, impact from foreign exchange. We have calculated the impacts on P&L due to variance from FX rate assumption. As you can see in the table on the left, revenues were down by JPY 0.6 billion, and on expense side, cost of sales and operating expenses were up by JPY 0.6 billion. And there was not much impact on operating profit, though the impact was slightly the negative, and therefore, we put minus mark to 0.
For our transactions denominated in foreign currencies, particularly those with Roche, we hedged 80% of them in the preceding year. Therefore, we are not impacted significantly, even when rates on the market fluctuate wildly. The remaining 20%, transactions denominated in foreign currencies, which cannot be hedged, and of those with 2 guys' overseas subsidiaries constitute our exporter to FX without hedging. Such impacts are reflected here but for the 9 months under review, FX impact was still on operating profit. This concludes my part.
I'm Minoru Hirose of R&D Portfolio Management Department. Let me provide the overview of development pipeline for the third quarter. On Page 13, provided are the projects under development as of October 24 for oncology, bone and joint and renal areas. Projects with advances in stages, since the last briefing session on July 26, 2018, are shown with red stars. In oncology area, global Phase III study was started for Alecensa, targeting the indication for adjuvant therapy for ALK-positive non-small cell lung cancer. For TECENTRIQ, global Phase III study was initiated with the target indication of adjuvant therapy for triple negative breast cancer. As the global Phase III study targeting new adjuvant therapy for triple negative breast cancer is currently ongoing. From this time onward, the indication in the pipeline has been changed to early breast cancer.
Please turn to Page 14. Here we provide a table of projects under development for autoimmune, neurology and others. In neurology area, GYM329 has been included in this portfolio table. In others, global Phase III study has been initiated for RG7716, faricimab. A project licensed in from Roche, targeting diabetic molecular edema as an indication.
As for SA237, satralizumab, marked with a blue star. It's target indication was neuromyelitis optica, or NMO, but this has been changed to neuromyelitis optica spectrum disorder, or NMOSD, in accordance with the guideline. At the Congress of European Committee for Treatment and Research in Multiple Sclerosis, which was held this month, the results of global Phase III study were presented, which I would like to explain later.
Next, I would like share development status on Page 15. ACE910, or HEMLIBRA, was approved in the U.S. on October 4th, for routine prophylaxis to prevent or reduce the frequency of bleeding episodes in adults and children with hemophilia A without factor VIII inhibitors, administered subcutaneously once weekly, every 2 weeks or every 4 weeks. This time, additional dosing options of every 2 weeks or every 4 weeks in adults and children with hemophilia A with factor VIII inhibitors were also approved.
Next RG7159, Gazyva was launched in August this year as a treatment for CD20 positive follicular lymphoma. Perjeta was approved in Japan this month, as new adjuvant and adjuvant therapy for HER2 positive early breast cancer, based on the results of APHINITY study and others.
Let me continue explanation about development status. For Alecensa, a global Phase III study was started targeting adjuvant therapy for ALK-positive non-small cell lung cancer. For TECENTRIQ, a global Phase III study was started, targeting adjuvant therapy in combination with paclitaxel for triple negative breast cancer. Next for RG7716, or faricimab, which is a bispecific antibody, which simultaneously inhibits vascular endothelial growth factor, or VEGF, and angiopoietin-2, which induces increase in vascular permeability. A global Phase III study was started with a target indication of diabetic macular edema. GYM329 is an antibody originated project in Chugai and was out-licensed to Roche in preclinical stage, for which Phase I study was started in the quarter.
Please turn to Page 17. I would like to recap other programs under development. Alecensa was approved in China in August, as first-line treatment for ALK-positive advanced NSCLC. For Rituxan, submission was filed for CD20 positive chronic lymphocytic leukemia. For RG1450, gantenerumab, the second global Phase III study was started in July, targeting early Alzheimer's disease.
Next, for RG7596/polatuzumab vedotin, an antibody drug conjugate project targeting CD79b, Phase II study was started in Japan, with a target indication of relapsed or refractory diffuse large B-cell lymphoma.
As for OWL833, which is an Oral GLP-1 receptor agonist originated in Chugai with the target indication of Type II diabetes. As mentioned in our press release, license agreement was signed with Eli Lilly for global development and marketing.
Please turn to Slide 19. I would like to explain the results of the study on satralizumab. NMOSD is a refractory disease, which relapses repeatedly causing visual disorder or a motor dysfunction with optic neuritis and myelitis as its main symptoms. Therefore, it is very important how relapse can be prevented. The data from SAkuraSky study, which were presented recently, showed that satralizumab patient group showed a statistically significant reduction of the risk of relapse by 62% in patients with NMOSD as compared with placebo arm achieving the primary endpoint.
Results from subgroup analysis indicated the reduction of the risk of relapse in NMOSD patients with anti-aquaporin-4 antibody by 79%, as compared to placebo arm, and relapse-free rate at week 48 and week 96 were both 91.5%. In patients without anti-aquaporin-4 antibody, the risk of relapse was reduced by 34% compared to placebo arm. For safety of satralizumab, favorable profile was confirmed.
Now please go to Slide 20. I'm going to use 2 slides to explain results of other trials. Results of IMpower132 and 133 studies for TECENTRIQ were presented at the 2018 World Conference on Lung Cancer last month. IMpower132 is a study targeting first-line treatment for non-squamous NSCLC, which evaluates the add-on effect of TECENTRIQ in combination with pemetrexed and platinum-based chemotherapy. The risk of disease progression was reduced by 40% in comparison to chemotherapy alone group. Median OS was prolonged by 4.5 months, but this endpoint was not met with statistically significant difference at this interim analysis. This study is still ongoing and the final OS data will be obtained next year.
Next IMpower133 is a study targeting first-line treatment for small cell lung cancer which evaluates the add-on effect of TECENTRIQ in combination with chemotherapy. In both co-primary endpoints of median PFS and the median OS, TECENTRIQ's benefit was confirmed with significant difference.
Please look at Slide 21. Results at interim analysis of IMpassion130 studies targeting first-line treatment for triple negative breast cancer were presented at the European Society for Medical Oncology held from last week through this week. This study is designed to evaluate to TECENTRIQ's add-on effects in combination with Abraxane. In both ITT group and PD-L1 positive patient arm, median PFS, one of co-primary endpoints was met with statistically significant difference. At this interim analysis, prolongation of median OS was not observed with statistically significant difference in ITT group. However, median OS was extended by 9.5 months in PD-L1 positive group, which was clinically meaningful.
Having said that, this study is designed to conduct statistical analysis based on hierological testing. The analysis of median OS in PD-L1 positive patient group is not regarded as confirmatory. This is the first Phase III study, which demonstrated efficaciousness in cancer immunotherapy for triple negative breast cancer.
Please turn to Slide 22. Here are results of clinical trials for entrectinib. Results were presented at the 2018 World Conference on Lung Cancer held last month. For ROS1 fusion positive NSCLS (sic) [ NSCLC ]. Overall response rate, or ORR, was 77.4%. Median duration of response was 24.6 months and intracranial ORR was 55%. As for NTRK fusion positive solid tumors, ORR was 57.4%, median DOR was 10.4 months and intracranial ORR was 54.5% and these results are presented at the European Society for Medical Oncology.
Lastly, Slide 23 is the list of projected submissions. This concludes my presentation.
I'm Seki with UBS. I have several questions. First of all about HEMLIBRA. I think one the key is accounting processing of export to Roche. Mr. Itagaki has repeatedly said price degradation is a key. Considering the line extension in the U.S. on October 4, how do you see a change of price in the guidance released in January-end of 2019?
Up until now, we received all the different questions on HEMLIBRA unit price for export. My response is, since last year to the end of this year, our production cost plus a certain level of margin is our price for export. Actual performance by the third quarter that we will have 3 more months to go, we will apply this price for export for the next 3 months as well. Full year forecast is JPY 2 billion. We have extra JPY 2 billion export by third quarter. And of course, if we will export that product in the fourth quarter, there is some increase of sales possibly. In the U.S., noninhibitor was approved and Roche will start to generate sales. Then, of course, you may wonder about export of our product to them. At this point in time, last year production cost plus margin was applied as a unit price to export for JPY 3.1 billion. And this year, JPY 2 billion equivalent was exported for 9 months. So JPY 5.1 billion combining current export price is relatively low. And if you look at them on a volume basis, stable and continuous patient access can be ensured. Of course, based on the assumption that the noninhibitor would be approved in mid-October in the U.S., we forecasted and set products towards that assumption. We do not expect to see a big sales increase due to this noninhibitor in the fourth quarter. The price change from current price to new price will not happen by the end of this year, and next year when the right timing comes, we will give you explanation. I want to explain about the gap of current export price and new export price. We already exported the products to Roche, and we received a question many times about how and when this gap will be adjusted. My answer, so far, was either royalties or passing onto the future export price. About new price, if you look at Roche local sales, currently, the products are more rapidly penetrated in the markets than we thought. We plan to receive by royalties from the fourth quarter in the line of ROOI.
So you will start in the fourth quarter. What is your plan in terms of volume? You will make a big volume in the fourth quarter? Or you will spend several years and then book as amortization, for example, depending on Roche's sales in the markets?
We will adjust the gap of current price and new price. I just say gradually. It depends on the growth of Roche sales from now on, but we will not adjust everything at one time as royalties in the fourth quarter.
Our onetime income of USD 50 million transaction will take place in the fourth quarter or first quarter of next year?
As is in the press release, the contract that was made by the end of September and this transaction is subject to potential competition authority clearances and other customary closing conditions. And once they will pass the inspection, USD 50 million will be paid to us as a onetime income. So the timing is not either this year or next year, but when they will pass this inspection. And of course, this isn't opposed to the actual performance by September, nor our full year forecast.
Also, I have 2 question about R&D. First question is about ERY. I think a clinicaltrial.gov trial was suspended and could you explain the background of this?
I'm Hirose. There were some minor protocol deviations, and we decided to suspend the trial to find a cause and take preventive actions. There is no safety issue of our product. That is all.
One final quick question about the TECENTRIQ. If you think about overall Avastin, IMpower150, EGFR muted patient responded, as was presented at ESMO. There are a lot of the Japanese EGFR muted patients. So I think -- and this is a huge opportunity for Chugai. How will you promote that? Is it possible to describe that in optimal use guideline or a package insert?
I am Sato. At this point in time, it is not clear how this will be described in the optimal use guideline or package insert. Of course, we think this will be a very big opportunity if we can actively promote this.
I'm Hashiguchi with Daiwa Securities. I have 3 questions. First question, export to Roche is high generally. You gave us a detailed explanation on HEMLIBRA earlier, how about Actemra and Alecensa? Will they be better than full year forecast possibly? Or is this just because of early shipment timing?
First of all, Actemra shipment is making a better progress than we expected initially. And I think actual performance of full year will be better than forecast. Alecensa had a shifted shipment timing in the second quarter and there were both good and bad progresses. But now in the third quarter, Alecensa is our most on target and for full year, this will be just on target, we think.
Second question is about Alecensa. Takeda's ALUNBRIG first-line Phase III trial outcome is released. How do you see the future competitive risk?
I'm Hirose. I think the trial results are almost exactly what we anticipated. It looks effective to brain metastases, follow-up period of the data was short this time. I think we will have to watch for a while. About safety, prevalence of interstitial pneumonia was 4%, which is higher than 1% of Alecensa. And there is a big concern about interstitial pneumonia in Japan. So we think doctors hesitate to prescribe their product possibly. That is all.
Finally, about GYM329 injectable. What is the modality or with what technology background was this drug discovered? Also, if it's possible, could you disclose the mechanism? Neuromuscular diseases are very broad. So could you drill down and explain about an indication specifically?
I'm Hirose. Our antibody engineering technology was used to develop this product. I'm sorry, but mode of action is not disclosed at this point in time.
I'm Yamaguchi with Citigroup. I may be asking a question from different approach, but it is said here and there that we will not have influenza epidemic or no pandemic that much in this the season, how do you anticipate that?
I'm Sato. I'm sorry, but to be honest, I don't know.
That means there is no sign of flu, epidemic or pandemic so far?
That is correct.
As was discussed a lot, our progress is quite good, but cost maybe bigger than anticipated. Basically, you may not revise the forecast but you expect to see better actual performance than the forecast this year. Am I correct?
Yes, you are.
I think the data was released on TECENTRIQ combination with Avastin to treat hepatic cancer. It is more costly if 2 drugs are prescribed in Japan. But do you think TECENTRIQ opportunity will be bigger to treat hepatic cancer by this combination?
I'm Hirose. We see the results are very good for Phase Ib study. Also, global Phase III study is ongoing. We'll be watching the outcome of the Phase III study to see the opportunity.
Understood. About the question, Mr. Seki asked earlier, I have one clarification about HEMLIBRA. Did you say new royalty structure will be started in Q4?
That is correct.
I see. In other words, royalty and sales image on Q4 is maybe depending on sales, as you said. So I don't know about the ratio, but will that indicate future royalty rate? Am I correct?
Maybe the word, royalty, is confusion. For Roche sales, we already started to receive regular royalty, which is similar for Actemra, for example, currently. This is part of ROOI. In addition to that, there is one more royalty to fill in the gap of pricing, starting in the fourth quarter. And this new royalty will not last forever.
Right. This is only for adjusting the gap?
That is correct. Not all the amount of the gap will be adjusted in the fourth quarter. But depending on their sales, the gap will be adjusted.
Understood. That means you are not telling us when new royalty rate will be applied? There are 3 different royalties then. Second one is just adjusted gap and third one will be added to the first one in the next year onward and you will not share the timing of that with us?
That is right.
I'm Muraoka of Morgan Stanley. I'm afraid I'm going to ask further detailed question as a follow-up on Yamaguchi-san's last question. Regarding the next 1-year guidance, which we are expecting to see in January or February next year, if you do not appropriately take into account, normalizing unit prices from the beginning of the year, the guidance may end up with excessively low numbers that may entail immediate upward revision. Therefore, my question is about your thought behind the guidance. Should I have such concern or not?
As of today, we have not determined what kind of guidance will be published around that timing next year. But of course, as we have done so far, our guidance, including forecast export of HEMLIBRA, total ROOI without breakdown and so forth will be disclosed. This will be a guidance based on our best effort assumptions or decisions made internally by that time and we would like to do our best in explaining the assumptions at that time. At this moment, therefore, we have not thought about what the guideline will look like and what assumptions it will be based upon.
Understood. To make sure I understand the situation, concerning export of Actemra, in Q3, the growth of export to Roche seems to have slowed down from double-digit to single digit growth. Is it fair to say that signs of long-term inventory adjustment have not been seen yet?
Right. We believe there haven't been yet.
Next about Tamiflu. I think it was reported in newspapers this morning that the government had disposed of Tamiflu worth doses for 8.2 million people. Have you been sounded by the government about your capability to produce the next round of stockpiling?
No, we have not. According to the government stockpiling policy published in March this year, the target has been reduced to doses for 45 million people from 47.7 million people, which was the original target. I assume that this was based on the distribution inventory held by companies or on the market. As reported this morning, stockpiles are disposed of when use by date is reached. But this was, of course, understood by companies from the stockpiling policy in March. Therefore, we have not been contacted by the government about future stockpiling at all, given the announcement this morning. In our full year forecast, government stockpile is estimated at 600 million, which is based on what we have been officially asked to provide.
Understood. My last question is about GYM329. Roche had opted in before it proceeded to Phase I. Is it fair to say that Roche has expectation in this project as interesting one as they did with SKY?
I think it is fair to say that.
This is Wakao speaking from Mitsubishi UFJ Morgan Stanley. My first question is concerning sales progress of TECENTRIQ. Sales increased significantly from Q2 to Q3 reaching well above the plan. Could you tell me what changes have taken place from Q2 to Q3? I assume that you are taking share of market from competitors, but please give me the current situation behind this increase.
As for such details in each line, I'm afraid that we are not able to answer, but we believe that it is gaining share steadily and the prescriptions are increasing.
Next about Alecensa. While your original plan was ambitious, it's sales seem to have been flattening quarter-on-quarter in the U.S. as well as globally. It may not be relevant but for ALK inhibitor for NSCLC, have you seen any changes in how ALK inhibitor is used or any other changes?
For ICI or Keytruda, ratio of conducting test for such treatment is increasing significantly. And rate of simultaneous testing for ALK is slowing down, which I think was a reason.
Is this the same situation in the U.S. and Europe?
Well, we do not have information on that.
Then is that the situation in Japan?
Yes, it is.
Understood. My next question is about project under development. Please teach me how to interpret data concerning satralizumab SA237. I believe you have obtained favorable results from the study. But when they are compared with the data for Soliris with similar indication, in terms of relapse rate, Soliris seems to be superior to your antibody. Now you have data and in comparison to Soliris data, could you please brief me of advantages of satralizumab?
First, our subject population is different from that of Soliris. Specifically, patients with anti-aquaporin-4 antibody were evaluated in study on Soliris. As I explained in the development status section in my presentation, in SAkuraSky study on satralizumab as well, in patients with anti-aquaporin-4 antibody alone, relapse-free rate at week 48 was 91.5%. So we interpret that data in anti-aquaporin-4 antibody positives subgroup alone were comparable. For safety, satralizumab SA237 has demonstrated very favorable safety profile. In terms of administration, there is a difference between IV formulation and SC formulation. Have I answered your question?
Yes. understood. Can I assume that in principle, you have not changed your forecast on market potential for SA237 from the assumption you had before data became available, that it is in line of your expectation?
Yes, that is fair to say.
This is Sakai of Crédit Suisse speaking. I think almost all questions have been covered. But for clarification, I would like to confirm that next medium-term management plan will be disclosed at the same time as financial briefing on Q4 results?
Yes, that is correct.
Understood. My next question is about SKY59. Could you please give me an update on this? I think you have suspended a study voluntarily. Have you kept your plan intact to read out by the end of the year? And I have been frequently asked about this, do you plan to disclose any data at ASH?
As for your first point, yes. We had suspended a trial but it was confirmed not have any safety issues and the study has been already resumed. Concerning the timing of data disclosure, we plan to disclose data from Phase I, II studies by the end of this year or at ASH.
Okay, then that is confirmed, right?
Yes, it is.
Understood. My last question is about HEMLIBRA. When I heard a conference call by Roche, I think there was a comment that the demand for noninhibitor was very strong in the U.S., while it had been known that there was a strong interest. But after its launch, the demand has been found to be or likely to be much stronger than expected?
I think that was the nuance.
I think it is yet to be launched in Japan and Europe, but have you received any feedback from Roche about the situation in the U.S., which may impact your production or export of HEMLIBRA at Chugai for this fiscal year or onward? Could you please tell me your feeling?
Whether or not noninhibitor is progressing faster than expectation is yet to be seen. We have to look at actual results. We have been informed of not more than what Roche has announced externally. As for production, it is not something that we can make immediately given changes in future demand assumption. So we are producing based on Roche demand, as we said earlier. We have been shipping within the range of volume, which allows us to absorb certain level of upside and downside in demand for inhibitor or noninhibitor. If what you have referred to occurs, it will make us happier. But we do not have any further information than that.
Understood. I think this was also mentioned as comment at Roche. They said that they did not keep much distribution inventory and most sales were directly to users. Is this your understanding as well?
Given the uncertainties about where our patients are, at which hospitals and how much switching may occur in prescription and so forth, I do not think that Roche does not have any internal or distribution inventory. But I think they made that comment with a backdrop that lead time is relatively easier to read than for other products. But as we have mentioned, as regards to our export, we have already shipped sufficient volume to prevent out-of-stock situation.