Eisai Co Ltd

TSE:4523

Earnings Call Transcript 2022-Q2

[Unknown Executive]

[Interpreted] It is now time. We would like to begin financial results presentation session of Eisai Co., Ltd. for the second quarter fiscal 2021. This session is live streamed and distributed to those who are participating from telephone line. Those of you who are participating through the teleconference, please download the slides from our website and please click forward. Those of you who are watching live stream, please continue to watch the screen.

Now let me introduce the presenter today, Mr. Haruo Naito, Representative Corporate Officer and CEO. Now over to you, Mr. Naito, please.

[Haruo Naito, executive]

[Interpreted] Thank you. This is Naito speaking. Now I would like to report to you the results recorded up until the end of the second quarter this fiscal year.

Now here, our overall P&L. As you see in the headline, Lenvima and other global brands, 4 in total, have steadily grown, and MORAb-202 and other strategic options have been made in timely manner. Therefore, we have been able to secure favorable results for the first half. Revenue was JPY 362.4 billion, up 14% year-on-year. Cost of sales was improved by 3.1 percentage points from a year earlier due to product mix improvement and also receipt of milestones and onetime payments and so forth. And gross profit grew almost 20% from a year earlier at 19% from a year earlier, making steady increase.

R&D expenses and SG&A expenses. Lecanemab, ADUHELM and Lenvima, at a crucial point in development of these, we allocated resources proactively. And if you look at total expenses, which were JPY 221.6 billion, up 9% from the previous year. So increase in total expenses was controlled within the increase of gross profit. So we believe that there was a financial discipline, to some extent, to control the expenditures. Operating profit was JPY 60.9 billion, up 79% from previous year. Significant growth was recorded. ROE for the interim period was 12.9%.

As I said regarding revenue, increased by JPY 45.3 billion, out of which the impact by ForEx was JPY 13.7 billion. Regarding 4 global brands, I'd like to use the next -- following slide to explain. In top left, Lenvima reached JPY 91.8 billion, up 34% year-on-year, showing very robust growth. In the middle, Halaven. In China, Patient Assistance Program or PAP has been applied, which led to expansion of patient access. Therefore, Halaven grew 7% year-on-year, steady growth.

And bottom left, Fycompa, AMPA receptor antagonist, only available -- orally available agent. In all regions, monotherapy was promoted as well. Therefore, Fycompa grew in all regions. The bottom in the middle, Dayvigo, orexin receptor antagonist is shown. In Japan in May of this year, the restriction of administration has been lifted. Since then, we have seen significant growth. As you can see, a very high growth ratio was recorded from a year earlier. In total, our 4 global brands recorded JPY 133.2 billion, up 32% from a year earlier.

Now turning to revenue in regions. The regional revenue grew 4% year-on-year, increased by JPY 12.3 billion. And in Japan, as you see in these bullet points, there was the generic of Lyrica launched. And also, there was an impact of drug price revision and transfer of right for Treakisym. In total of these, there was a minus or negative impact of JPY 17.5 billion in Japan.

So now turning to region analysis. On the right-hand side, as I said earlier, in Japan, the record of revenue was 70 -- 87% of the previous year. Americas, growth of 18% year-on-year has been shown. And in China, Lenvima has been posted on the National Drug Reimbursement List. Therefore, access has been significantly expanded. Given this, the revenue was JPY 58.9 billion, up 28% year-on-year. Rapid growth was shown. EMEA, Lenvima also show -- have shown steady growth and Asia and Latin America as well.

And the revenue in pharmaceutical business was JPY 308.4 billion, up 4%. And profit was JPY 146.5 billion, up 14% year-on-year. And in the bottom left, as you can see, here is the ratio of each region's revenue to the total revenue. In Japan -- the share of Japan has declined while we saw increase in share by America. And 27.4%, which is written outside of pie chart, this is the combination of China and Asia and a part of the Latin America. Combining these regions, 27.4%. Very high ratio was taken by these regions. This is the outstanding point.

And at the very bottom of this Slide #4, implementation of strategic options. MORAb-202 related studies collaboration with -- concluded with BMS and which brought about a positive impact of JPY 49.6 billion.

At the very bottom, you can see the license revenue total because of the transfer of the sales rights for Neuquinon and AcipHex. And last year, we recorded the impacts of the transfer of rights for tazemetostat in the first quarter last year and the -- which was JPY 11.5 billion negative. And in total, license revenue total impact was JPY 43.6 billion.

And here, operating profit grew 179% or plus JPY 26.8 billion. Impact of ForEx of JPY 5.6 billion and a proactive investment was made into R&D expenses for Lenvima and other global brands. And shared profit paid to Merck in the amount of JPY 41 billion for Lenvima, which was an increase by JPY 11.3 billion year-on-year. But we believe that this was very proactive investment. And proactive investment was made also in ADUHELM, which was increased by JPY 6.6 billion from a year earlier.

Regarding these expenses, financial integrity has been kept in making these investments. And divestiture of rights for Zonegran in Europe, the gains from this divestiture in the amount of JPY 14.7 billion was recorded in other income and expenses.

Now turning to items on balance sheet. Equity ratio stood at 64.1%. We believe that we have maintained a strong financial structure. And net DER is minus 0.3x. Net cash is JPY 219.1 billion. And assets with potential impairment risk in total accounted for 34.2% of net assets. Therefore, we believe that we have a very strong balance sheet.

From BMS -- in addition to what was recorded in revenue, R&D reimbursement of JPY 21.7 billion was received from BMS on top of what was included in the revenue, and this was recorded as deposits received. And R&D expenditures which will be incurred for MORAb-202 will be spent from this deposit. And free cash flow was JPY 60.5 billion.

Now we like to open a new chapter of Alzheimer's disease treatment with ADUHELM and lecanemab. Update -- so update is going to be given here. Now I would like to talk about updates on ADUHELM or aducanumab. There are 4 points to improve communities' understanding of clinical data as well as value of the treatment that expand amyloid beta -- diagnosis based on amyloid beta and clarity of reimbursement for AD-DMT and increased listing at medical sites and support infrastructure for infusing.

In the United States, new treatment approaches in this very critical, and this is familiar to many of us, Alzheimer's disease. As new rising therapies do come around, there are many points to be overcome towards which we are trying to make utmost efforts together with Biogen to address each of these issues to be overcome. I would appreciate if you could understand this. And clinical data and the value of the treatment should be understood more by the community.

As we wrote in this first bullet, the results from EMERGE/ENGAGE clinical trials. Now the article is being currently under review at a top-tier journal. A final review process is ongoing now. And we are expecting that this article will be published soon regarding these Phase III studies.

Articles regarding such results from the studies will be reviewed by a top-tier journal and to be published. And once that is realized and then it will increase the reliability and trust in the clinical data. I suppose that there will be adoption or listing by medical institutions going forward of this drug. I believe that once the publication is made, it will bring about a great positive impact on the listing.

And then next, how much the value of the treatment with aducanumab will be, particularly for patients and their families, and that is going to be crucial. And the basis for such value of treatment, based upon the EMERGE study -- study EMERGE, simulation was conducted. And then aducanumab treatment, how long the duration of the transition from MCI to moderate AD could be prolonged by this treatment with aducanumab.

Regarding the long-term clinical benefits of aducanumab, based upon such simulation in August of this year, the article regarding such analysis is published in Neurology and Therapy. And other than that, article related to the value of the aducanumab treatment is now being submitted for publication. And transparency of clinical data as well as the value of the treatment of aducanumab, the substantive understanding will be further promoted by these publication activities.

And second point regarding the expansion of amyloid beta diagnosis. Of course, the scope of amyloid PET imaging reimbursement is only allowed for clinical trial use. However, there are various negotiations and discussions ongoing in order to expand the scope of reimbursement. And Biogen and Eisai are also promoting the use of a CSF amyloid beta testing through utilization of free access support program. And the number of patients who are using this free access support program is increasing. Compared to the end of September, now the number today has been doubled in terms of the number of patients who are utilizing this support program. So clearly, for further use of ADUHELM, steady steps are being made one by one.

And the third bullet here, we'd like to discuss blood testing for diagnosis. Like in the case of hemoglobin A1c for diabetics, we're -- we think that there will be such effects in blood testing, C2N diagnostics testing to measure amyloid beta 42/40 ratio and ApoE4. Such services have been initiated by C2N diagnostics, and we expect that increasing -- certain number of patients are going to utilize such services for testing.

And for -- regarding the next bullet point, clarity of the reimbursement for AD-DMT. Now NCD is being analyzed and -- with draft NCD decision expected in January next year and to be finalized by April next year. And guidance will be issued at that time. And this analysis is not for ADUHELM amyloid beta reduction targeting AD-DMT antibodies. In addition to ADUHELM, this NCD, national coverage determination, will be applied to other antibodies.

So this is the current framework. When it comes to these very innovative drugs for targeting reduction in amyloid beta, most modern sciences and technologies are gathered for bringing about this breakthrough medicine. We needed to secure the access by those patients who really need such therapy. We believe that this is very critical and indispensable in the modern society. And guidance shall be presented which will allow such realization of the access by the patients who need it.

And regarding the examples of reimbursed cases by Medicare Advantage plans. For example, Humana, which is one of the large operators, has initiated coverage for patients who meet the Phase III trial entry criteria.

The fourth bullet is to increase listing at medical sites and support infrastructure for infusion. Currently, ADUHELM is being infused at approximately 120 sites. And at the end of September -- compared to the end of September, the number has been almost doubled. So with such high speed, the number of institutions is increasing. I think that we expect to increase the number gradually.

And the conclusion statement here at the bottom, with AD-DMT -- we are pioneering a new chapter in AD-DMT. We strongly believe that these efforts will be in full bloom to reduce the burden of patients and their families and also by the society at large. We believe that such approach and treatment will bring about the hope and dream. And we are sure that these efforts will be becoming full bloom soon. And ADUHELM as well, the spring when ADUHELM flower will be in full bloom, it will not be so far into the future.

Now I would like to discuss lecanemab, which is to follow ADUHELM. AD-DMT leading position is what we are aiming at. Currently, we are making efforts to establish a leading position in AD-DMT. This page describes 4 important points regarding lecanemab, which I would like to discuss today.

First is robust amyloid clearance. Within 18 months, amongst target patients, approximately 80% were converted to an amyloid negative and robust removal capability of amyloid was displayed. In 201 study, a beta reduction and outcomes were used as endpoint and these correlate. And this was shown in a statistically significant fashion.

Next is about dose. 10 milligram per kilogram biweekly, at this dose, favorable safety profile was observed. In this case, to be more specific, ARIA-E. The ARIA-E incident with lecanemab was 9.9%. Regarding other antibodies, the incidence of ARIA-E for other antibodies, I'm sure you are aware of through various publications or announcements. And ARIA-E incidence with lecanemab is by far very low. And as for ApoE4 carriers, among ApoE4 carriers, ARIA-E incidence was sustained at 14.3%, thus showing a favorable safety profile of lecanemab.

The third point is early treatment effect. Because of low incidence of ARIA-E, titration is not required. From the initial dose, effective dose can be realized. First dose is an effective dose. Naturally, the most important performance of the drug, which is the early onset of the efficacy, is strongly expected with lecanemab. That is a major advantage for lecanemab. I will be showing this in the next slide by using blood biomarkers.

Lecanemab -- various conditions can be measured. And therefore, dosing regimen of lecanemab and designing of the dosing may be able to utilize blood biomarkers. And as shown in the last bullet point, subcutaneous formulation is being developed. Including self-injection, subcutaneous formulation will be developed. And we hope to increase convenience.

The fourth point is confirmatory study of lecanemab. We are aiming for rolling submission of accelerated approval. After a complete study, we are aiming for full approval naturally. And what is necessary for full approval is one confirmatory study, which is Clarity AD study. And this study is underway steadily, and readout is expected in second quarter fiscal 2022.

AD-DMT antibodies Phase III study, in comparison to other antibodies, we believe that it will be one of the earliest to have the readout. And it may be a drug that is nearest to receiving full approval status.

Based on accelerated approval pathway, we have initiated a rolling submission of BLA. And rolling submission -- we would like to complete a rolling submission in the first half of calendar year 2022. For that, we are putting all our efforts so that we are able to complete rolling submission in the first part of calendar year 2022.

I mentioned in passing earlier of plasma A-beta 42/40 ratio for lecanemab, and this is the data. As you may be aware of already, the left side is the PET SUVr change in 201 study core period in the 18 months and 2 years of gap period and then open-label extension study period. Horizontal axis shows the chronological time line, and the vertical axis is SUVr. And on the right chart, A-beta 42/40 ratio is shown. And A-beta 42/40 ratio reduction is shown. And this slide is -- top side and downside are reversed from SUVr. However, when we compare SUVr and AB 42/40 ratio, they behave almost in a similar way, suggesting correlation.

Core study and after gap and then OLE study was carried out. And data from such study design, I believe, is only from lecanemab. In that sense, this is a precious data. When looking at gap period of off-treatment, amongst the patients who were given placebo or active dose, there is a gap, and that gap is maintained during the off-treatment gap period. This gap does not change much.

A slight increase in accumulated A-beta during the gap period without any drug administered. The spent time might lead to, once again, increase of A-beta that may be the suggestion of the data. And blue line in the placebo arm at this timing of the start of OLE when lecanemab, the active dose, is given, rapidly, amyloid beta reduction is observed.

Plasma A-beta4 2/40 ratio, how it can be used? And in development of dosing regimen, plasma A-beta 42/40 ratio will be a very important data. And that is why I wanted to share that with you today.

Now Eisai has a pipeline in the clinical stage for Alzheimer's disease, disease-modifying therapy. 4 drugs are shown on this slide in the medical, clinical, type of physiological development. Because of that development, currently, when we look at ATN, amyloid, tau and neurodegeneration, this continuous change in pathophysiology is understood as the pathophysiology of Alzheimer's. I believe there is generally a consensus on this. And at each stage, we have very strong theme. And as such, Eisai is a unique existence, and we believe that in that sense, we have a leading position globally.

Disease stage is shown at the bottom of the slide. As for lecanemab, from preclinical AD to mild AD, the wide range can be covered by lecanemab. And with a synapse regenerant to late stage, an option may be offered with the tau antibody in the middle. Currently, there were report of failure of various tau antibody. But so far, this development is underway smoothly. And these lines are overlapping, suggesting combo therapy going forward.

In particular, regarding lecanemab and E2814, anti-MTBR tau antibody, with world-renowned academic groups, we have collaboration underway. This, I believe, is a testament that these drugs are highly evaluated by the academia. ACTC, Alzheimer's Clinical Trial Consortium, which is a consortium of top academic institutions in the United States, has selected lecanemab for preclinical AD. Phase III study AHEAD3-45 is being carried out. These are Phase III -- this is a Phase III study for regulatory purposes. If this is successful, then indication may be expanded to early stage of the disease.

On the right side, for E2814, centering around Washington University, DIAN-TU group is formed to look at tau drug in dominant inherited Alzheimer's disease group. And E2814 was the first to be chosen amongst other drugs in the same class. And this is looking at hereditary Alzheimer's patients. But we are also preparing Phase II study for sporadic Alzheimer's patients.

Now I'd like to report to you our efforts in oncology area. Oncology treatment options are driven by new technologies, by novel drugs and a combination of novel drugs. That is the day and age that we are in. And with that, we would like to establish franchise for multiple cancer types.

What is central for this is Lenvima. The current sales for the first half is JPY 91.8 billion. The full year target is JPY 181.5 billion. The main market is the United States market, but in China, as shown on the left, revenue has more than doubled.

And there is a dotted line in the left chart. In this fiscal year, there are 2 sales milestones. If we achieve these milestones, we will be able to receive onetime payment from Merck, and this graph shows that. In calendar year and in fiscal year, we have milestones. In solid lines, red is from January to now and blue is from April to today. Actual results is shown, and this shows a steady advance. We are in line with achieving milestones. We have strong conviction that we will be able to achieve the milestones, and that should be positive upside events.

On the right side, indications are shown. Currently, for 5 cancer types, we have received indications. And for each, we have solid shares. Company-wide oncology commercial and medical resources are increased. In the United States, direct visits, in-person visits, have increased to almost triple the level from the previous year. And in the meantime, to respond to COVID-19 pandemic, various digital tools were also developed. All of these put together, we were able to strengthen customer engagement capabilities.

And in this fiscal year, we have received 2 new indications. First is advanced EC FPST, following prior systemic treatment. In the United States, full approval was given. And in EU, positive EU CHMP opinion was given. And in Japan, it's under priority review as orphan drug designation.

For advanced RCC, first-line approval was given in the U.S. In EU, positive EU CHMP opinion was given. And in Japan, review is underway under a standard timetable. Before the end of fiscal 2021, we hope to receive approval in Japan.

First, renal cell carcinoma. What are the desires of RCC patients are shown on the left. Of course, clear elimination of disease, complete response is most desired. In the middle, based off the indication, CLEAR study results are shown. CRR was 16.1%. In comparison to other treatment options, CRR superiorcy was achieved. And as for this complete response ratio, this has brought about various other effects. At 24 months, survival of these patients was 100% in case of complete response patients. So this leads to extension of overall survival.

On the right side, the arrow indicates what we have done in RCC area. In 2016, in combination with everolimus, approval was given. And with the KEYTRUDA combination, approval was given. And now Phase III study as a first line in combination with belzutifan or MK-1308A, are underway. And as a second and third line in combination with belzutifan, Phase III study will be carried out -- is ongoing. And franchise development efforts between Merck and Eisai will continue.

Next is EC, endometrial carcinoma. 309 study led to approval. In EC, so far, chemotherapy was the mainstream therapy. And chemotherapy-specific hair loss or numbness and pain in hands and foot were side effects that led to deterioration in quality of life. But Lenvima plus KEYTRUDA is a chemo-free treatment option, which is expected to improve quality of life in these respects. As for first-line combination, Phase III study, 001, is also underway, and we expect the results before the end of fiscal 2021. So we would also like to establish strong franchise with EC.

Now turning to HCC, hepatocellular carcinoma. As you are aware of, HCC treatment is such that -- Japan is leading treatment for HCC. REFLECT study is Phase III study for Lenvima monotherapy, and this met approval. Japanese KOLs have contributed much with them in the conduct of this study. For example, surgical treatment combination or as shown in the middle, combination with TACE were ideas contributed by the surgeons in Japan. And one such combination, Lenvima, KEYTRUDA and TACE combination is used in Phase III study, which is underway right now. And Lenvima, KEYTRUDA HCC first-line Phase III study is also underway. And we would like to obtain results before the end of fiscal 2021, as shown second from left.

And on the right, MK-1308A and Lenvima combination HCC first line study -- Phase II study is also ongoing. Important cancer type HCC -- for the patients of HCC, we would like to be able to give them hope. And we would like to fulfill our role of developing new treatment options one after another for HCC.

LEAP studies, HCC 1L, EC 1L, I have already discussed. And NSCLC 1L first line -- melanoma first-line Phase III studies are also being carried out. As shown on the right side of the page, in early phase, we obtained a strong clinical data based on which Phase III studies were designed. And we would like to obtain results between 2021 to 2022.

Next is MORAb-202. This is a strategic alliance product with BMS. Structure of MORAb-202 is shown here. I would like to point out that payload is eribulin, Halaven. This is in-house developed product, and antibody was developed by former Morphotek, farletuzumab, anti-folate receptor alpha antibody. Four farletuzumab antibodies are linked -- with linker to eribulin. And this linker is also a result of a superb scientific technology of Eisai. That is the ADC that we have.

As shown in the middle, we hope that this will become the best-in-class of the next-generation ADC. That is because it has favorable characteristics. In blood and in cell, this is less prone to aggregate. This is because 4 antibodies for 1 molecule of Halaven are exerted in terms of its performance through a good linker. And FRa-positive target cancers will take in this. And immediately, the linker will be cleaved and eribulin will exert cancer-killing cell action. This is rapid and efficient.

In cancer cells -- after cancer-killing action of cancer cells, eribulin will further be released to affect positively cancer microenvironment. What is known is that in -- there is a positive effect on mesenchymal stromal cells. And therefore, MORAb-202, we consider, is next-generation ADC.

On the right, cancer types with high folate receptor alpha expression frequency are shown. In collaboration with BMS, we plan to start global registration studies in 2022.

Lastly, I would like to discuss expansion to a new region, expansion to Africa with a base in India. African continent will see increase or boost of population, and economically, it will become an engine of the global economic growth. It is a promising region, and we would like to consider India as a place that will play leading function vis-à-vis Africa. In SADC, Southern African Development Community, centering around South Africa; and EAC, East Africa Community, centering around Kenya, we would like to make advances.

Commercial purpose exists. But at the same time, we would also like to achieve SDGs. This, in very essence, is about achieving SDGs. For one thing, in African region, there are tropical diseases, including neglected tropical diseases. And many people are suffering from tropical diseases.

We are engaged over 2 decades in development of new treatment for tropical diseases, including mycetoma, leishmaniasis, lymphatic filariasis, malaria, tuberculosis and others. In collaboration with GHIT Fund and DNDi, we would like to be on the ground doing this, especially centering around Kenya branch office to be established soon. We would like to continue our solid efforts in development of new treatment for tropical diseases.

Next is price-zero business, where we provide a drug for free. And this is considered business, and that is why we call this price-zero business. At the center of this is DEC tablets. diethylcarbamazine tablets. And this is indispensable in treating lymphatic filariasis. More than 2 billion tablets are supplied to 28 countries. And these tablets are 100% produced in Vizag plant in India. Vizag is also producing API, so it's a very important location. And DEC tablets, from the very beginning, are 100% produced by Vizag plant. For SDG purposes, Vizag is also playing a very important role.

And centering around Nairobi, in the community on the ground, we would like to carry on our activities. And I think that will be a very important part of achieving SDGs. And we would also like to introduce new drugs smoothly.

In low-income countries, it is often said that the latest medical achievements do not reach these countries easily, but we would like to engage in introducing new medicine in African countries as a part of SDG-related efforts. In SADC or EAC region countries, Halaven, Fycompa, Lenvima, Dayvigo, these new medicines are soon to be approved, as shown in this timetable. We would like to make sure that there will be access to these drugs in Africa. The health of African people is very important, so we would like to remove concerns about health and gaps in health care.

This is my last slide showing a full year forecast. On the right side, previous disclosure as of August is shown. More than 30% upward revision of operating profit was made. We made upward revision, and this is the second upward revision. Revenue was revised upward to JPY 730 billion. Operating profit was revised upward to JPY 78 billion from JPY 701 billion and JPY 76 billion, respectively. And this is supported by our global efforts.

In the second half of the year, Lenvima, ADUHELM, lecanemab will continue to receive resource investment. And as I have mentioned earlier, we will have strong financial discipline that is within the growth of revenue and profit. We will be making expenditures. We will observe such strong financial discipline while we make proactive investment of resources.

Operating profit of JPY 78 billion is forecast. This is an increase year-on-year of 51%. EPS is JPY 211. ROE is 8.4%. Based on sound finance, we plan to pay dividend of JPY 160.

That concludes my presentation. Thank you.

[Unknown Executive]

[Interpreted] Now we would like to start Q&A session. Today, we'd like to receive questions first from those who are participating by telephone.

[Operator Instructions] The first question from Citigroup Securities, Mr. Yamaguchi.

[Hidemaru Yamaguchi, analyst]

[Interpreted] Yes. This is Yamaguchi speaking. Can you hear me?

[Unknown Executive]

[Interpreted] Yes, we do hear you.

[Hidemaru Yamaguchi, analyst]

[Interpreted] I have one question. In America, current status of ADUHELM, thank you for explanation. And towards becoming a big product in the market, I understand that you are doing various activities. And Biogen's management did not expect much revenue, but it has been slower than expectation. That was the comment made by management of Biogen.

And regarding this situation, for the short term, there are various hurdles based upon that. And what are the issues and problems? So what should be done? I think there are many various things that should be done in short term as well as medium to longer term. And what is most important to be done in short term? So do you think that you have to wait until NCD to be finalized? And for short term, as the management of Eisai, could you please give us your take or feeling as the management of the company?

[Haruo Naito, executive]

[Interpreted] Thank you for your question. I think I have touched upon that in my presentation today. EMERGE/ENGAGE studies are ongoing. And regarding the transparency of the data from those studies and objectivity of the data, various discussions are ongoing. And as I said earlier, the analysis from the data from these studies will be published in top-tier journal. I don't think it will take much longer time because final review is ongoing. I think that this publication, once realized, will lead to resolution of the situation.

Among patients, there are some patients who are asking why ADUHELM is not being prescribed to them, and they are repeating such question. Of course, NCD to be finalized and concluded within 6 months. And for AD-DMT antibodies, NCD will be considered.

And last, for AD-DMT, so such a breakthrough innovation, we believe that access should be secured with a guidance to be issued going forward. We have expectation to such guidelines. At which timing should we expect such guidance to come? Not far in the future, within 6 months or so. I think there will be a big transition in phase. That's why we have been making various efforts.

[Unknown Executive]

[Interpreted] Next, from Nikkei, Akama-san, please. Akama-san of Nikkei newspaper.

[Kenya Akama]

[Interpreted] Can you hear me? I'm Akama from Nikkei. I have one question. Eli Lilly has donanemab or Roche Switzerland has gantenerumab. These competitors are also preparing to file submission. And on this situation, what is the view of Mr. Naito, CEO? And what is the positioning of ADUHELM and lecanemab? How do you think you can differentiate vis-à-vis competitors?

[Haruo Naito, executive]

[Interpreted] Thank you for your question. When we think about drugs, we will have to look at category of drugs. Oftentimes, a class of drugs in multiple numbers emerge at the same time, and this is rather a positive thing. There will be greater understanding of that group of drugs within the community.

On top of that, these 4 drugs are drugs that have clear characteristics. And in the end, the characteristic of the drug may also be determined by the label given by FDA. Depending on the FDA's label, there is much that will be determined in terms of the characteristics of the drug. But in case of lecanemab, titration is not necessary. From the beginning, effective dose can be administered. This can be a major characteristic of this drug.

Increasing number of drugs in the same class overall is something that we welcome. And regarding our drugs, we are confident that we are able to position our drugs with their characteristics effectively.

[Unknown Executive]

[Interpreted] From Morgan Stanley Securities, Mr. Muraoka.

[Shinichiro Muraoka, analyst]

[Interpreted] This is Muraoka of Morgan Stanley speaking. For lecanemab, BLA rolling submission to be completed, and you mentioned the timing for completion. Earlier, Mr. Naito said by the end of first half, in the period from January through June next year. Could you please specify further, for example, in the first half of next year, first quarter or second quarter, January, March or April, June? So could you please specify a little further when you were expecting to see the completion?

[Haruo Naito, executive]

[Interpreted] It's a hard question, Mr. Muraoka, I'm perplexed. When I say in the first half of next year, that is the first half.

[Shinichiro Muraoka, analyst]

[Interpreted] Understood. Okay. I'm expecting to hear further detailed explanation. Maybe you will still say that it is in the process when you are speaking at the information meeting to be held in March.

[Haruo Naito, executive]

[Interpreted] Well, I was considering how to say yesterday. But when I say the first half of the year, please understand it will be the first half.

[Unknown Executive]

[Interpreted] Next, Mr. Sakai from Crédit Suisse, please.

[Fumiyoshi Sakai, analyst]

[Interpreted] Can you hear me? Yes. This is Sakai. Can you hear me?

[Unknown Executive]

[Interpreted] Yes, we can hear you.

[Fumiyoshi Sakai, analyst]

[Interpreted] Question about Page 10, lecanemab, and it says biomarker. And I think it's certainly a biomarker. But last time or in the presentation before last, I think this was also shown in clinical symptoms, improvement or deterioration to back up the biomarker data. Do you have such data?

And this is simply the change of amyloid in the blood. Unless you have other background data, it will simply be a change of amyloid in the blood. Do you have other background data?

[Haruo Naito, executive]

[Interpreted] This will be addressed by Ivan Cheung, Neurology President.

[Ivan Cheung, executive]

Thank you very much for the great question. Actually, later on this month at the CTAD congress, we will show additional analyses based on this data. For example, on Slide 10, you see the changes in PET and also the changes in plasma A-beta 42/40 ratio. So at the CTAD congress, we will also explain the correlation with clinical endpoints such as ADCOMS both at the population level and at the individual level, correlation with both PET and plasma A-beta 42/40 ratio. Stay tuned. Thank you.

[Unknown Executive]

[Interpreted] Next, from JPMorgan Securities, Mr. Wakao.

[Seiji Wakao, analyst]

[Interpreted] Yes. This is Wakao speaking. I'm from JPMorgan. Regarding ADUHELM, I have a question. By the end of the year, approval in EU and Japan will be more visible. If you have any update on this, please give them with us.

In Japan, I suppose that ADUHELM is approved. And then another event will be to list the drug on the reimbursement list. And with the drug price, and I think that -- do you think that the market penetration will be progressing as you expected like in the situation in the United States? And after the launch of the drug and then ADUHELM- or amyloid beta-related issues or hurdles or challenges for penetrating this drug in Japan, are there any implications that you have been starting to see?

[Haruo Naito, executive]

[Interpreted] Thank you for your question. I'd like to invite -- Neurology Business Group President, Mr. Ivan Cheung is going to respond.

[Ivan Cheung, executive]

Thank you very much for the question. We are working very hard with our partner, Biogen, in our dialogue with the PMDA in Japan and of course, with EMA in Europe. And we, of course, will further provide update as those processes further advance.

And to your question about Japan, of course, you are correct, the approval and then the price listing. That process is only within 2 months. And as you can see here, we discussed earlier, in the United States, approval in June this year. And then the NCD decision by April next year. That's a 10-month process. In Japan, that will be a 2-month process. So obviously, we believe the access issue in Japan will be addressed in a much more speedy manner. That's our thought. Thank you for your question.

[Haruo Naito, executive]

[Interpreted] This is Naito speaking. I would like to supplement explanation about the Japan situation. Amyloid beta confirmation, of course, will be indispensable, therefore, PET test and CSF -- how CSF test will spread in this market, I mean in terms of the capacity of PET testing as well as coverage by insurance reimbursement. Regarding these methods, there needs to be a consistent approach in addressing these events.

There are industry players and academia, congress, academic societies. So with high transparency, we like to keep close communication with those relevant parties. If and once approval is granted for ADUHELM, we would like to take consistent approach in timing. And such confirmation of amyloid beta becoming available, we are making utmost effort to be consistent in all these matters.

[Unknown Executive]

[Interpreted] We would like to receive last question, Mr. Kohtani from Nomura Securities, please.

[Motoya Kohtani, analyst]

[Interpreted] This is Kohtani from Nomura Securities. Can you hear me?

[Unknown Executive]

[Interpreted] Yes, we can. Please go ahead.

[Motoya Kohtani, analyst]

[Interpreted] About ADUHELM, initial year revenue is quite limited. And even before launch, Eisai and Biogen were saying that it will be limited. So the revenue being limited is not a surprise. There was no Alzheimer's disease drug, and there is no established diagnosis. And questionnaire has to be undergone. MRI scan is necessary, whether amyloid beta exists or not. PET testing is necessary, but it's not covered by insurance. I think a series of infrastructure cannot be developed overnight.

My question is -- well, I was able to understand revenue of -- outlook of the revenue of ADUHELM. But about these diagnostics, about the diagnostic infrastructure, how advanced is it? What is the bottleneck? Could you elaborate on this? And regarding diagnostics infrastructure, when this is developed and in view of imminent launch of donanemab and gantenerumab, how much of an advantage does Eisai have?

[Haruo Naito, executive]

[Interpreted] Ivan Cheung will respond.

[Ivan Cheung, executive]

Thank you very much for the question. And you already know that we have a sponsored testing program on CSF, and the usage has accelerated quite a bit in the past months. So that's very important to educate decisions and facilities, how to do that.

The second thing, which I'm sure you know very well, is the insurance coverage of a PET by Medicare. And right now, the Medicare coverage of PET imaging is quite restrictive. And you have, I'm sure, heard from Biogen that a lot of efforts are underway to work with the CMS to update that coverage for PET imaging. And a lot of patient groups and academic societies in the United States are also working -- communicating very closely with the CMS on this matter.

We do believe that update will come soon, and that obviously will open up the market for all the antibodies, not just for ADUHELM but also for lecanemab. But for us, we believe the biggest opportunity lies in blood test. And this is an area that we are putting our most focus and resources into enabling a simple patient journey going forward. Thank you.

[Motoya Kohtani, analyst]

[Interpreted] I have a request to Mr. Naito. I know that your presentation materials and IR materials are very detailed and very clear because there are the citations and references to the literature as well. And I think that with only 15 minutes for just question and answer, I don't think that all the questions can be covered within such a short time. So could you please extend the IR meeting from 60 minutes to 90 minutes so that we can have a 1 hour for Q&A?

[Haruo Naito, executive]

[Interpreted] Well, thank you very much for a very good suggestion. I have been practicing several times in order to shorten my presentation time to secure as long time as possible for Q&A session. But together with IR team, we would like to consider your suggestion seriously. Thank you.

[Unknown Executive]

[Interpreted] Now with this time approaching to the closing time, so we'd like to conclude today's briefing session for the results for the first half. Thank you very much for taking time out of your busy schedule.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]