Eisai Co Ltd

TSE:4523

Earnings Call Analysis

Eisai Achieves 3% Revenue Growth Amid LEQEMBI Market Launch Challenges

Eisai reported a Q2 FY2024 revenue increase of 3% year-on-year, totaling JPY 385 billion, driven primarily by a 5% growth in the pharmaceutical segment, notably from LEQEMBI, which saw a JPY 15.9 billion rise. However, operating profit declined to JPY 27.8 billion (down 13%), with SG&A costs up due to market expansion efforts. LEQEMBI aims for U.S. profitability by FY2026, while Japan and China expect breakeven in FY2025. Total annual revenues are projected at JPY 42.5 billion, highlighting the challenge of managing infusion capacity against rising demand.

Steady Revenue Growth Amidst Challenges

Eisai Company Limited has reported a 3% year-on-year increase in revenue, totaling JPY 385 billion for Q2 of fiscal year 2024. The pharmaceutical segment showcased even stronger performance, growing by 5%, although the company faced a comparative drop due to one-time revenues recorded in the previous year in other business segments.

Strong Performance by Key Brands

A significant portion of the revenue growth can be attributed to three key brands, collectively referred to as the '3 Ls': Lenvima, Dayvigo, and LEQEMBI, which together have driven a 21% increase in revenue, exceeding JPY 200 billion. Notably, LEQEMBI was the standout performer, generating a JPY 15.9 billion increase year-on-year, underlining its robust market acceptance and sales execution.

Profit Margins and Cost Management

Despite the revenue increase, the company reported an operating profit of JPY 27.8 billion, reflecting a decline to 87% of last year's levels. At the same time, profit for the period stood at JPY 21.7 billion, or 94% of the prior year's performance. The increase in Selling, General, and Administrative (SG&A) expenses, primarily due to strong Lenvima performance-related profit sharing and costs tied to the ongoing launch of LEQEMBI, was a contributing factor to the profit decline. The company is focused on managing cost increases in tandem with revenue growth.

No Change to Full Year Guidance

Eisai reaffirmed its full-year forecast, indicating stability in its outlook despite the quarterly performance variances. The emphasis remains on the three key brands (the 3 Ls) while striving to enhance operational efficiency and manage expense growth effectively.

Interim Dividend Declaration

The Board of Directors has resolved to declare an interim dividend of JPY 80 per share, reflecting a commitment to return value to shareholders while navigating through its growth and investment agendas.

LEQEMBI's Market Penetration Strategy

LEQEMBI continues to show promise as it is still in the initial stages of market penetration, with approvals and launches across Japan and China occurring relatively recently. The company is strategically focused on enhancing treatment initiation rates and ensuring continued patient follow-up, highlighting its commitment to expanding the reach and impact of this promising therapy.

Earnings Call Transcript 2025-Q2

[Unknown Executive]

Thank you very much for taking your time out of your busy schedule to attend the earnings announcement session by Eisai Company Limited. We would like to begin the presentation sessions of financial results and business update for Q2 fiscal 2024. This is conducted in hybrid format combining in-person attendance and virtual attendance. Please find presentation material plus report and financial results. For those of you who are attending in person and those who are virtually attending, please refer to those materials on our website.

The presenter is Mr. Haruo Naito, Representative Corporate Officer and CEO.

[Haruo Naito, executive]

[Interpreted] Now we'd like to begin our presentation on the Q2 results for fiscal year 2024. First, let us share with you the P&L. Revenue grew by 3% year-on-year to reach JPY 385 billion.

And if you look at the breakdown of the revenue, the pharmaceutical business grew by 5% year-on-year from the previous year. Steady growth was shown. But there were onetime revenue recorded last year in larger amount. Therefore, revenue decreased in the other business.

So at 67% year-on-year, the gross profit increased by 3% year-on-year. R&D expenses accounted for the ratio, which was down by 1 percentage point. In terms of ratio to the revenue, of course, while we are making proactive investment in development of our LEQEMBI business, we have been able to enhance the efficiency in investment in R&D activities.

SG&A expenses increased. There were 2 reasons for the increase. As you see below that, because of the strong Lenvima business performance, therefore, there were increased expenses regarding the shared profit of Lenvima paid to partner, which increased. And the LEQEMBI, it's still in the midst of being launched into the market. Therefore, due to these, SG&A expenses increased.

As a result of these, operating profit was JPY 27.8 billion, 87% of the previous year's level. Profit for the period was JPY 21.7 billion, which was 94% of the previous year's level.

Next, now if I look at the breakdown of the revenue migration, the pharmaceutical business increased by JPY 13.5 billion from a year earlier, as you see on the right-hand side, recently, what we call 3 Ls: Lenvima; Dayvigo, whose generic name is Lemborexant; and LEQEMBI. These 3 global brands are driving the growth. In total of those 3 Ls, the revenue exceeded JPY 200 billion, which was 21% up increase from the previous year.

The increase -- the largest increase was driven by LEQEMBI, which grew by -- increased by JPY 15.9 billion year-on-year. When it comes to the onetime income, which was decreased from a year earlier, therefore, the revenue stayed at the level, which was up 3% year-on-year.

Next, turning to the operating profit. Pharmaceutical business increased by JPY 2.7 billion, with more efficiency in R&D investment, which led to the factor to increase the profit by JPY 2.7 billion. As I said earlier, the expenses of the profit of -- shared profit of Lenvima to partner decreased the factor by JPY 3.9 billion and also onetime decreased the profit by JPY 5.1 billion to reach JPY 27.8 billion.

And there is no change to the full year forecast. We are going to put more focus on the 3 Ls, and we would like to control the costs increase within the increase of the growth of the gross profit in order to achieve the increase in both revenue and profit.

And JPY 80 per share as the interim dividend was resolved at the Board of Directors meeting held today. Going forward, I will put focus on LEQEMBI in my report to you today. This is to recap.

For a long time, I think I have been discussing LEQEMBI. And I feel that a long time has passed since launch of the LEQEMBI. But actually, the first market where we launched LEQEMBI for the first time, at that market, the accelerated approval was granted in January last year. After that, in July, in the same year, full approval, traditional approval was obtained. And since then we could begin the full-scale sales activities.

Until the end of this first half, only the 15 months passed since the launch. And in Japan, the approvals were obtained in September 2023, and it was launched in December. And therefore, the 10 months have passed as of the end of September. And in China, LEQEMBI was approved in January this year and launched in June this year.

Therefore, now in all of these 3 markets, LEQEMBI is still in the midst of being launched into these markets.

Given this backdrop, when we say there can be treatment, I believe that the treatment with LEQEMBI has been established. So what do I mean by this? As you see below, the early initiation and continued treatment even after plaque removal continued to sustain the slowing of clinical decline or improvement with expanding effects.

And the accumulation of data in real world has progressed. Therefore, incidence of ARIA in Japan as well as in the U.S. has been contained within the range described in the packaging side. Therefore, LEQEMBI is administered while ensuring safety.

So in the meantime, LEQEMBI stopped treatment that has been established during this period. And there are several data sets, which are supporting this statement. And core data is as strong here because I believe that this is the core data. In the Chris van Dyck presented this data at the CTAD, which was recently held. So what I'd like to say is over the period of 36 months, when the treatment was provided, on the left-hand side, the 18 months core period under CLARITY AD study.

And on the right-hand side, you see the open-label extension study. The period is shown here, and there are 3 lines. The top line shows, in the CLARITY AD study from the outside of the study until the end of the study, 18 months, active treatment was provided to this group. And even after that, the patients continue to receive active treatment.

The line in the middle shows the group, which received a placebo treatment in the core period on OLE study, everyone was shifted to active arm. Therefore, they continue -- they received active treatment in the OLE.

The bottom line shows the ADNI cohort. A population with the same baseline or very close to the baseline of the Clarity AD and over the 36-month period. if we could compare the bottom line and the line in the middle, up until the 18 months, you can see almost overlapping each other.

So ADNI cohort can be recorded as placebo or control arm in a core period of the Clarity AD. If you compare the first line and second line, the second line means that this was the population, which started to receive active treatment from 18 months onward. And there seems to be efficacy. However, the gap between the first line and the second line has not shrunk. So that means that the earlier the initiation of treatment was, the greater the benefit was. So that is the interpretation we can drive from comparison of the first and the second line.

And after the end of core period, a plaque was significantly removed in my opinion. And even after that, the active treatment was continued comparing the top line and the bottom line at the Month 18, CDR-SB, slowdown of the decline was 0.45, which was expanded to 0.95 in terms of the gap between the 2 lines.

Like DMT, the causal materials or substance continue to be removed. That means that the longer the treatment gets, the greater the benefit will be. So that is shown here. At the end of a core period, plaque was already removed. But even after that, the active treatment was continued and then the efficacy was supposed to be expanded further. So continued treatment seems to be very important. That is the message we can get from this data.

In terms of pharmaceutical agents, suppose that there is efficacy in the products and with the safety secured and then the continued treatment forms the maximum footfall for growth of the product. In that sense, we have made success. That is what I wanted to report to you today first.

Now turning to the actual results in sales for the first half of this fiscal year, comparing Q1 and Q2. The global total sales was JPY 16.3 billion globally, and there was the -- quarter-on-quarter growth was 160%, and 128% increase in U.S. and 186% in Japan and the green at the top consists mostly of China.

In Israel, there was an advanced treatment made. However, that is included as a fraction, but most of this portion is from China. Quarter-on-quarter, growth was increased in terms of sales by 7.8 folds. So we have been able to grow LEQEMBI, exceeding our business plan.

Having said that, as regards to pathway, particularly in the United States, there are some new movements that are emerging. Therefore, I would like to share with you what they are. First, there has been increase in amyloid beta confirmatory testing. As you know, utilizing either PET or CSF for confirmatory testing on amyloid beta. So this shows the heaviest portion of the pathway.

At the outset, we thought that this could be the bottleneck in the entire pathway. But this confirmatory testing on amyloid beta is not a limiting factor. To the contrary, there has been a significant increase in the number of amyloid beta confirmatory test in the United States.

For the fiscal year 2024 from January through to September, there was approximately 40,000 cases of the tests conducted, and it is predicted to reach approximately 60,000 cases. Approximately 4x that of the previous year. Therefore, we can say that the amyloid beta testing, PET testing is increasing significantly in number.

And the main factor for this is as you see in the next bullet, CMS, Centers for Medicare and Medicaid Services, responsible for reimbursement, lifted the upper limit on the number of A beta PET tests to be reimbursed. That was announced in October last year.

So with this immediately, the number of PET tests increased significantly. In addition to this, again, recently, CMS announced that the fees for reagents and the procedure fees for scanning, there used to be the upper ceiling on that. However, starting from next January, CMS announced that, that ceiling will be lifted as well.

So with regards to the PET tests, we believe that the number of tests for confirmatory testing will continue to increase in the United States.

Similarly, in CSF testing during the first half from April to September, the number of test performance was approximately 10,000 cases, almost double that of the same period of the previous year. So the amyloid beta confirmatory testing cases are increasing significantly and rapidly in the United States.

A possible factor for that is because of the blood-based biomarker, which is described at the bottom of this page. Before going through the PET or CSF testing, BBM is widely used for prescreening purposes. What kind of effects can we see from this? Patients with amyloid beta negativity is already identified. At the time of prescreening, therefore, they will not be referred to receive the PET or CSF testing. Therefore, confirmatory amyloid beta confirmatory testing efficiency has been improved with a higher positive rate. The efficiency has been improved significantly.

With this tailwind, amyloid beta confirmatory testing is not a limiting factor bottleneck in the United States along the pathway, but rather, this has become the gateway for patients to be sent to the next steps in the gateway or pathway.

So with the increased efficiency in the confirmatory testing and with 50% positivity. And it -- we believe that it used to be about a 30% positivity rate, but it has been increased to about 50%. Therefore, in the early AD amyloid patients with amyloid beta positivity is about 25,000, which consists of 20,000 people examined by PET and 5,000 people by CSF.

After confirming amyloid beta positivity, as you see in the middle, the tests will continue further. Before starting treatment, baseline MRI is conducted to confirm the history of cerebral hemorrhages. So after having this test, then since we'll go through APOE4 testing to see whether they are heterozygotes or homozygote or APOE for noncarrier. And after that, attending physician will explain the treatment and provide informed consent.

At Eisai, there are about 20,000 patients. And as you know, in the United States, after that, there needs to be a step to confirm the reimbursement eligibility because different individuals have different coverage. Medicare Advantage is widely used for most patients. However, the coverage scope and is deferred from a person to another. Therefore, there needs to be a step to confirm the coverage or eligibility with payers.

In Japan, this kind of work is not necessary. In most cases, however, actually, this is quite cumbersome and burdensome process in the United States. After confirming the reimbursement eligibility, then the patients are ready to be infused.

So during the first half, there are approximately cumulative 10,000 people who are ready to start treatment. And those who have received -- approximately 4,000 people have started to receive the treatment, but the remaining 6,000 people are supposed to be waiting for the start of treatment. Because of the shortage of the infusion capacity, which is deemed to be almost fully occupied. So there are about 6,000 people who are waiting for the treatment.

So once again, I would like to give you the overview of the pathway in the United States. Starting from top left, if someone finds any abnormality in daily lives, they will refer -- they will visit the family doctor, a primary care physician and simplified cognitive testing can be conducted. As you see at the top, primary care physician family doctors will see and consult with the patients. At this stage, there are approximately 600,000 people who sought the consultation with PCP at the end of September this year. This number has almost doubled from last year.

And media coverage about LEQEMBI was quite active in terms of publicity and journal and reporting in the media were very active. In the meantime, therefore, the awareness about AD as a disease has been enhanced quite significantly. The number of people who sought consultation with PCP has almost doubled.

And to the right, those people who are referred to neurologists amounted to about 500,000 people. And those people who are going through cognitive -- full-fledged cognitive testing and received amyloid beta confirmatory testing or referred to A beta testing, about 50,000 people are referred to the test. And based on MRI is 25,000 people. CSF will be taken by 10,000 -- 20,000 people and 5,000 people will receive MRI.

And based upon the CMS reimbursement data, inclusive of some estimates, we are showing these numbers. Therefore, we believe that these numbers are quite reliable.

And now reaching the informed consent, there are about 20,000 people after taking the reimbursement with payers. And now coming to the stage where people are ready to start the treatment, on a cumulative basis for the first half, there are 10,000 people. And as you see in the blue circle, there are 4,000 -- about 4,000 people who newly started treatment.

And comparing to the above number, 10,000 people and cumulative 10,000 -- cumulative basis, these 2 numbers are a very different infusion stage of people, 10,000 people. As of the end of September, those are the people who are receiving the treatment. Therefore, the infusion capacity could accommodate 10,000 people at that time.

So out of the 10,000 people capacity, why only 4,000 people could receive new treatment? That means that the 6,000 people were continuing on their treatment with LEQEMBI. Therefore, out of the 10,000 people capacity, 6,000 people equivalent capacity was already used. Therefore, there are about 6,000 people who are waiting on the pathway. ARIA monitoring is conducted as per the Package Insert.

So capacity along the pathway needs to be expanded and how? The number of patients who are going through pathway is increasing rapidly. Therefore, there needs to be an increase in the health care professionals and also systems or medical tools for managing the pathway is getting more and more important.

And number one, we needed to support the infusion capacity expansion. There are 2 measures to be taken. Firstly, we will focus on IDN. As you see at the bottom, IDN stands for Integrated Delivery Network, which are playing up major roles in providing treatment in AD, and they are a very huge group.

One group, we are negotiating with about 200 IDN. But on the average, 1 IDN can accommodate 50 to 80 hospitals or infusion centers or sites within 1 group. They are all huge. For example, Mayo Clinic is either one of the largest IDNs in the United States and covering nationwide.

Under one unified management policy, they are running these hospitals on site. There's -- also once a policy on the AD treatment is determined and all the hospitals and sites under the umbrella will conduct the treatment in the same policy. Therefore, the number of hospitals that can administer LEQEMBI infusion needs to be increased or infusion centers within the same group needs to be increased, and the infusion capacity needs to be expanded.

These are the 2 measures that are being carried out. And #2 is the AIC, Ambulatory Infusion Center, which spreads throughout the United States. There are large companies who are managing hundreds of the infusion centers. And with over 30 companies, as such, we have concluded contracts. We are expanding the number as well.

And a GPO, Group Purchasing Organization, which also has the huge infusion capacity, we are going to expand the infusion -- such contracts as well as reviewing the contracts with them. By doing this, as I said earlier, we are assuming that 10,000 people-equivalent infusion capacity, as of today, shall be expanded to 18,000 or 19,000 by the end of this fiscal year.

We have already concluded the contracts for increasing the number to that level already. Therefore, those are patients who are waiting, as I said earlier, will proceed to the stage of the infusion by the end of this fiscal year. And as you see in the bottom half, in the pathway or IDN, the duration of the process within the IDN network can be shortened or not.

And how we will be able to support the increase of the health care professionals in IDN? The example at the top, also an example of a huge IDN. Starting from the testing to start of the treatment, the duration of that process has been shortened to 5 days in this IDN. And why? Was it possible?

The hotel covered by this IDN is offered for patients to stay for a week. In the meantime, all the necessary tests and if necessary, a treatment can be initiated during the week. So such pathway is rolled out through this IDN or if you look at the second example, this is the university hospital-centered IDN in the South of America. They have a team, multidisciplinary conference is held in order to -- team is formed in order to provide a centralized management of patient information. And we would like to share these good examples with other IDNs and so forth.

At the bullet at the bottom, there has been a platform developed by a company, which is specialized in the development of such a management platform covering the testing and consultation and medication. We are offering this to medical institutions at no cost. And the management of the schedule of the patients and the duration of such processes could be shortened at such IDNs.

Once again, I would like to go back to the actual numbers. Regarding the sales from wholesalers to accounts or medical institutions, this graph shows the number of vials sold. This is not the sales numbers, but the sales numbers could be delayed in terms of accounting for or recording in the book but this shows the monthly number of vials delivered to medical institutions in the U.S. Therefore, this shows the actual trend of the expansion of LEQEMBI in the field.

So if you take a look at this, since the full-fledged launch was made, steady growth has been shown. And recently, we have seen sharper increase exceeding 50,000 vials monthly delivered to medical institutions. This is going through the cold chain. Therefore, medical institutions do not have a lot of stocks, therefore, at the time of delivery, the vials are used. And we achieved the highest monthly sales of vial in October.

So based upon this, we have made the JPY 16 billion as the forecast for the second half of this fiscal year in the United States. The full year forecast amounted to JPY 26.5 billion for the United States. This means that -- compared to the earlier guidance, this means that there was a decrease by JPY 17 billion. So what do we mean by the decrease by JPY 17 billion?

The 6,000 people who are waiting for the initiation of the treatment, suppose that these patients will steadily -- if they could proceed to the treatment in the first half and then that number could have been achieved or almost achieved. And as I said earlier, infusion capacity can accommodate 10,000 people as of the end of September this year.

So 10,000 patients on treatment was the number that should have been achieved by the end of last year. Therefore, because of the shortage of capacity for infusion, so there has been this delay by 6 months in the progress towards our goal in the United States.

So now turning to the next page, which shows the key factors in the near future, SC-AI and BBM. SC-AI stands for Subcutaneous Autoinjector in a pharmaceutical market. Obesity drugs are also administered as SC-AI formulation. Therefore, this can be easily utilized. Therefore, the SC-AI formulation has gained a lot of attention.

And BBM, blood-based biomarker, which I have been telling you. First, about new formulation and administration regimen, SC-AI. This is a game changer one. But before getting into the discussion of SC-AI, as we have discussed before, regarding IV maintenance treatment, we have already filed.

Where is initiation treatment? Where does maintenance treatment start? That may be a question, but this is to be reviewed by FDA, and we can't casually make the distinction. But Clarity AD study ran for 18 months and I think that can be one of the yard sticks. And for example, let's say that -- there can be a switch to new maintenance treatment.

And instead of biweekly treatment so far, monthly treatments become possible for maintenance treatment, meaning it will be reduced in frequency by half. Long hours of drive, frequency will be reduced and the requirement in terms of number of nurses and resource will also be reduced.

The second bullet point is about the SC-AI. First, maintenance treatment to be covered initially with IV can be replaced by SC-AI eventually. This is formulation of 360-milligram SC-AI for weekly dose allowing for self administration at home or outside of care.

And as shown at the right bottom, Terumo SC-AI will be used. This is an excellent device in our view. First, regarding needle, the tip of the needle is tapered. And it is tapered both on the inside and outside reducing pain significantly and syringe is made of plastic. So breakage or safety issues are reduced. And the part that moves does not use silicon and that prevents drug clumping due to use of silicone oil. And it can be given -- administered within 15 seconds whereas it takes 1 hour for IV infusion. This is by far very short duration and there are fewer administration reactions -- infusion reactions.

According to the data, we believe that this is going to contribute to streamlining the AD diagnosis and treatment pathway. Rolling submission is the type of submission we have been undertaking. And recently, this was completed, and we expect approval in the first half of fiscal 2025.

And then SC-AI for initiation treatment, we will be preparing to file submission for that to be granted approval. And in fiscal 2025, we are aiming to obtain approval in fiscal 2025. And if that becomes a reality, we can cover all of the treatment phases with SC-AI, visiting hospital for infusion, the time can be reduced, the manpower infusion risk, all of these can be reduced.

And pathway can be shortened, substantially and AD treatments can become more universal and standard. It will be a major step towards that. And we believe the biggest game changer will be the SC-AI formulation.

Next, about blood-based biomarker. This is game changer too or key factor too. Currently, more than 8,000 BBM tests are already conducted each month. And mostly, as I mentioned earlier, mostly these are for prescreening to screen out negative people to prevent them from moving to the next step.

Major testing companies have already initiated LDT. p-tau217 is also included in the test. And this is a highly accurate blood biomarker and not only for prescreening, but for confirmatory testing, p-tau217 testing might make it possible for confirmatory testing. So this is expected to be such a good BBM. And I believe that is also one of the reasons why BBM test number is increasing.

And as noted in the middle, Alzheimer's Association in the U.S., a very prestigious group and which is an organizer of AIC, is expected to issue clinical BBM guideline in Q4 of fiscal 2024. And for prescreening such and such biomarker to be used and for confirmatory such and such biomarker to be used may be shown in the guidelines and threshold. For use of biomarkers may also be shown. That is more or less decided.

With such guidelines in place, in clinical settings for both prescreening and confirmatory, BBM usage will be promoted. Rather than using one biomarker, composite of multiple biomarkers and ratios of biomarkers are used to allow for more accurate BBM and academic presentations have been made by 2 companies. One of which has already filed with FDA and the other is expected to file shortly. And the one is already given breakthrough device designation.

With such more accurate BBM diagnostic test, it becomes more likely that BBM can be used for confirmatory testing. And rather than PET and CSF, BBM may be used more for confirmatory testing. As shown at the bottom of the page, in fiscal 2025, BBM is expected to be incorporated for confirmatory use in A beta testing in the pathway.

These are the game changers or key factors, and as a result, we have near future outlook. Next fiscal year, right usage of IV maintenance and adoption of guideline and increased adoption of BBM are expected. And we believe the pathway is expected to -- we expect pathway to be streamlined.

And the 2 key factors, SC-AI formulation and BBM confirmatory testing are expected to be ready in fiscal 2026. At this point in time, the long pathway can be reduced significantly. Cognitive testing, A beta confirmatory testing with BBM and ApoE4 testing, all of these can be done at the level of PCPs family doctors.

As for MRI, this part may not change much, but -- as for drug administration, it can be at home or at the site of care and the burden of visiting an infusion center can be significantly reduced. So, at the risk from repeating myself, pathway can be streamlined substantially and PCPs will be involved on a full-fledged basis in AD diagnosis and treatment. That is quite imminent and leading to further expansion of the AD market.

Turning to the situation in Japan. As you are already aware of, in Japan, OUG, Optimal Clinical Use Guidelines, are in place. Under the OUG framework, physician requirements, patient requirement, site requirements are established by the government in Japan. And that leads to standardized pathway in Japan.

There is also mandatory all-case surveillance. Already at more than 600 sites in Japan, pathway has already been established. As for real world ARIA incidence, it is within the range described in the Package Insert. After the launch, it has been more than 6 months for some of the patients who are receiving treatment and the number of such patients is increasing. And that OUG -- as per OUG in the neighborhood, dementia disease medical centers, medical institutions with dementia specialists, these follow-up facilities can give treatment to patients who have been given LEQEMBI for more than 6 months and approximately 800 such facilities have agreed to treat patients. And the cooperation is promoted between such facilities and physicians throughout Japan.

So standardization and universalization of the pathway in Japan may be accelerating and maybe moving slightly ahead of that in the U.S. And from November 15 on TV, direct-to-consumer MCI awareness campaign will start, which will promote early consultation and diagnosis.

And as a result, we expect more people will be coming on to the pathway. We are establishing foundation in Japan and this establishment of foundation in Japan continues to evolve. And LEQEMBI treatment is expected to enter further expansion phase.

Pathway is shown around 200,000 people are visiting family doctors. Around 50,000 people are visiting specialists. Around 5,000 are receiving treatment. Patients waiting to receive treatment is not so large in number. And on the very right side, there is a follow-up facility. Follow-up facilities in the neighborhood are beginning to be involved in the treatment in Japan.

There's another market, China. There are 3 characteristics in this market. First is that it is a private market or self-pay market. It is not a reinsurance -- reimbursed market, but out-of-pocket market where LEQEMBI is being introduced.

In 30 provinces, in 93 cities, in 240 hospitals, LEQEMBI is already distributed, and is being administered. As for self-pay market, the patients use private insurance. And they also have opportunities of receiving private health examinations. And the number of people who receive BBM tests is increasing. And around 300 -- 3,000 people are expected to receive LEQEMBI treatment this year, and we expect increase by fivefold by 2026.

The second characteristics is usage of BBM in China. This is based on solid scientific evidence. AIC and the other day in Tokyo, there was an AA conference, and it was noted that BBM data in China -- or there were many presentations of BBM in China. There is academic research and physician-led cohort studies nationwide on BBM. And as shown here, top 5 independent clinical laboratories have established a nationwide diagnostic network.

The third characteristic is Yin Fa Tong. Eisai and Jindong Health has a joint venture business, which provides a full-scale AD digital platform already 610,000 users are in the platform and 6,000 physicians are registered.

I would like to further elaborate on this. As I have noted, in the self-pay market, people are purchasing commercial insurance. And including treatment and drug expenses, insurance provides coverage. Private health checkup and private nursing homes are also accessible by these people. So BBM testing and diagnosis is available more frequently.

AD and -- potential AD patients or potential early AD people may go to off-line testing, for web testing or may seek treatment through Yin Fa Tong platform. And main tool, BBM, are shown in the middle is offered under DESIRE model. What is called a DESIRE model? Which I also heard presentation of at AAIC; BBM, APOE4 testing and the [ CA ] are combined, and there was a comparison of BBM and PET and CSF. BBM, in that combination at high level of accuracy, it can offer results.

CLEAR AD study. This is covering 6 regions in China. It is a very large cohort study. And that data was also presented recently in Tokyo. BBM use in China is backed up by scientific evidence.

As for Yin Fa Tong, our joint venture is connected one of them and blood drawing sites can be introduced to patients. And infusion is given in hub-and-spoke model. Initial few infusions are given at hub sites and then in the neighborhood infusion sites, patients can continue to receive treatment.

Family doctor selection, testing site selection, infusion site selection at the most convenient location for each can be selected by patients by using Yin Fa Tong. And there are also apps to confirm the effectiveness of the treatment on a daily basis. And that allows patients to ask questions of doctors are also offered through Yin Fa Tong.

As for full year forecast, globally, JPY 42.5 billion is the global revenue forecast. Between the first half and the second half, year-on-year, 161%. 153% in the U.S., 184% in the U.S. (sic) [ Japan ] and in China, 152%, that is the growth from the first half to the second half. As I have discussed earlier, in the U.S. because of the delays, there was a decrease by JPY 17 billion. Overall JPY 2 billion in Japan -- JPY 1 billion in Japan will be offsetting that negative JPY 17 billion in the U.S.

And from the number that I've mentioned earlier, it is down by JPY 14 billion when -- in terms of this full year forecast. This is a message. For the first time in the world, we have launched a first-in-class drug that addresses the root causes of AD -- root cause of AD. There is no one before us.

It has been 1 year and 3 months since the U.S. full-scale launch, 10 months since the Japan launch and 4 months since the China launch, and LEQEMBI is in the midst of market introduction. And in the U.S., as I've mentioned earlier, there has been about 6 months of delays in the progression of sales results. And we regret this, but the reason is quite clear. This is a bottleneck of infusion capacity. It is not a structural reason or any reason due to manufacturing.

6,000 patients who are waiting to receive our treatment should be able to receive infusion since we have already concluded contracting for additional infusion capacity to cover that people who are waiting. And we are progressing with addressing current issues as well as we are taking initiatives to expand the new future market, and we recognize the great potential for market expansion ahead.

As for regulatory updates, U.S., Japan, China, South Korea, U.A.E., Hong Kong, Israel, United Kingdom, in these 8 countries, we have been granted approval. And in Europe and in other regions, regulatory review is underway in 17 countries.

As for EMA, European Medicines Agency, currently, reexamination process is underway. First, evaluation resulted in reduction. In the meantime, a very large number of European Alzheimer's disease-related organizations and key opinion leaders have called for approval on EMA. Specialist organizations, radiologists organizations, very large number of people leaders are called for EMA approval.

Even after Brexit, the U.K. is a major country in Europe and U.K. has given approval. Indication is for patients excluding APOE4 homozygous carriers and post authorization safety study was mandated. That is the approval given in the U.K.

This month, there will be CHMP meeting of EMA. We believe that LEQEMBI will be discussed. And as soon as we know the results, we would like to update you, and we await with much expectation.

I would like to share with you some more data. First, AHEAD 3-45. This is a stage before MCI preclinical AD stage targeted Phase III study, what kind of stage of disease is that? Cognitive function is normal, but borderline amyloid accumulation in the brain as shown in the middle on the left side. Cognitive function normal, but positive for amyloid accumulation in the brain. These are the target subjects.

And recently, on October 15, 1,620 subject enrollment was completed. Treatment will be for 4 years. Top line data is expected in 2028. So we are moving according to the schedule or slightly ahead of the schedule. At the recent CTAD, there was a presentation as shown here, of prescreening using BBM. The trial uses BBM for prescreening. This results in much higher AHEAD positivity rates, and it has improved PET screen fail rate.

Black line is before BBM prescreening. This shows a PET screen fail rate. 75% was fail rate, meaning 25% was the positivity rate. But with BBM prescreening, fail rate is 25%. 75% is the positivity rate. Screening success rate has increased substantially, resulting in much greater efficiency.

Next is E2814. This is anti-MTBR Tau antibody. As shown at the top, Eisai is aiming to overcome the 2 major pathologies, A beta and tau. And regarding tau pathology, our flagship drug is E2814. This antibody, from the very beginning, there is a cohort of DIAD, dominantly inherited Alzheimer's disease, a patient cohort, which is managed by -- and there is a very large number of patients who are registered here.

And this group has evaluated the cohort of patients. And part of the data is shown here. And another important piece of information is NIA-AA. This is National Institute on Aging, NIA and the earlier mentioned Alzheimer's Association. Jointly, the 2 organizations are looking at tau pathology and they are recommending tau pathology-related biomarkers, 3 biomarkers; CSF p-tau217 and MTBR-tau243 and Tau PET using these 3, that is recommended.

And as a result of such assessment presented at CTAD, the red line at the top is DIAD Observation Group without any treatment intervention and the bottom is a group that is given E2814. These are 2 biomarkers, CSF biomarkers over -- it suggests a significant decrease in these biomarkers. Tau accumulation in the cells, it shows that there was a decrease of tau accumulation in the cells.

On the right side, it is a very small number of patients, 3 patients, but this is world's first data. Please look at the image. Red part shows accumulation of tau and other -- these are patients 1, 2, 3 in the right side, there is a graph. This is quantification of using tau PET or SUVR, and it shows the trend for each patient.

The top patient at the page baseline did not have much tau accumulation. In such patient, the top blue line, there is no deterioration observed. So it suggests that deterioration was suppressed. And the bottom 2 patients have more red regions at the baseline. And the red region is decreasing much in the image after the beginning -- start of the treatment.

And as shown on the right side in the graph, there is also a marked reduction of tau. DIAD data and NIA-AA recommended biomarkers were applied to DIAD patients. And pharmacodynamic effect of E2814 is being observed. And now we are moving on to initiation of a new Phase II study expanded to sporadic AD.

We have presented data at CTAD, which can be a very strong driving force. I would just like to use 1 slide to share with you the current status on oncology. Revenue, JPY 164.9 billion, increase of 9% year-on-year. We had strong results in the first half and primarily driven by the performance in the U.S.

JPY 115.9 billion, 17% year-on-year. There was a strong growth in the Americas. In all of the 10 cancer types, the results exceeded the previous year same period. Especially as shown on the right side, RCC, for both clear cell and nonclear cell, we have first-line indication, which is included in the NCCN recommendation.

We also have a LEAP-012 study, which is jointly conducted with Merck. Lenvima (sic) [ lenvatinib ] plus pembrolizumab plus TACE. So TACE plus these 2 drugs, presentation was made at ESMO. Primary endpoint PFS is already achieved. And the other primary endpoint OS is showing positive trend.

Data is now being accumulated. NCCN guideline inclusion application has been completed. RCC shift to alpha inhibitor combination trial called LITESPARK, a Phase III study is also steadily ongoing.

In conclusion, I have long paragraphs. And this is written in passion, so please allow me to read this out. Alzheimer's disease, AD diagnosis and treatment pathway is being created by LEQEMBI. In the United States, the first country in the world to launch LEQEMBI, the issue regarding reimbursement of A beta confirmatory testing has been resolved.

The utilization of BBM has increased, and we are seeing a large demand being created. This has led to an increase in patients waiting for the treatments making it important to secure infusion capacity and effectively deploy medical staff. We know great passion and enthusiasm of the relevant medical professionals who are working diligently with us.

In fiscal 2026, we expect wide usage of BBM for Abe ta confirmatory testing in medical community and coverage of LEQEMBI SC-AI as an option for the entire treatment period from initiation to maintenance. Through these efforts, PCPs family doctors will play a crucial role in the AD diagnosis and treatment. And AD diagnosis and treatment pathway is expected to be further simplified.

LEQEMBI treatment will become a much more common and popular medical practice. In Japan, the initial introduction facilities are expanding simultaneously at the follow-up facilities, which cover the patients after 6 months treatment, PCPs as well as local dementia medical centers have started to participate in the treatment.

The generalization of AD diagnosis and treatment is progressing, and we are seeing an increase in sales. In China, with AD digital platform, it is being -- market introduction is progressing steadily, and we expect rapid increase in demand.

Regarding regulatory status, we believe EMA reexamination process is in its final stages. Opinions advocating strongly LEQEMBI approval from European patient organizations and leading AD experts have been shared. Approval by the U.K. authority has already been granted.

We are aiming to successfully tackle the 2 major AD pathology in beta and tau and continue with a robust pipeline for this purpose. MTBR-tau antibody, E2814 has confirmed its pharmacodynamic evidence by using the most modern biomarkers in tau research. In addition, AHEAD 3-45 study with LEQEMBI Phase III study is steadily ongoing.

Aiming to start treatment to preclinical AD stage, Eisai will continue to commit to function as a pioneer at the forefront of the world in the field of AD, and we further collaborate with medical professionals and above all with patients' families to realize the day that AD will be changed to a curable disease as soon as possible.

We would now like to open the floor for questions.

[Unknown Executive]

First, we will entertain questions from analysts and investors before taking questions from the press. If you have a question, please give us your name and affiliation before your question. If you have a question, please indicate by raising your hand. Yes, attendee seated in the second row, please.

[Hidemaru Yamaguchi, analyst]

This is Yamaguchi of Citi. Regarding the marketing -- current marketing for LEQEMBI. Please do not withdraw it. On this basis, we'd like to continue discussion with you. And one question I have regarding U.S. market about infusion center that has been discussed earlier as well. And this time, you have mentioned a specific numbers, like 10,000, which will be increased to 20,000. And based upon the IV, of course, once SC is introduced, the status will be changed. But for the coming 1 year, do you think that the 10,000 can be increased to 20,000. This can be a bottleneck again. And based upon the 20,000, the sales trend will be estimated and assumed on this basis.

[Haruo Naito, executive]

Earlier, I mentioned towards this -- at the end of this fiscal year, 19,000 infusion capacity has been already secured by contracting. And in fiscal year 2025, the number will be exceeding 26,000 in terms of the future capacity to be secured. By introducing IV maintenance therapy and infusion capacity will be allocated more towards initial treatment and increased sales will be supported by infusion capacity.

[Hidemaru Yamaguchi, analyst]

By FY 2025, we believe that the likelihood of securing enough capacity is already established. And then in the equation, I think [indiscernible] is also considering the same thing. I believe that they will try to secure the infusion center capacity. So you mentioned that the 19,000 or 26,000 are already secured. Do you think that in taking into account the competitors' movement?

[Haruo Naito, executive]

Thank you for your question. Yes, we have taken into account the movements by competitors in terms of securing the infusion capacity.

[Hidemaru Yamaguchi, analyst]

SC is going to be very important. And SC-AI maintenance, submission has been already completed, and you are just waiting for the approval to be given. And then SC-AI initiation treatment. It is to be -- going to be approved, but have you completed the submission if you have any time line for submission, please share it with us.

[Haruo Naito, executive]

Excuse me, I forgot to mention this. SC-AI is the new BLA because of the Biologic License Application, which is different for filing for IV. So it is equivalent to the submission for a new product. So independent submission has been filed. And the Part D of Medicare will be granted. Currently, it is included in the Part B. But Part D means that the distribution will go through the pharmacies.

So new pricing will be considered. For SC-AI, as I mentioned briefly, the value will be much higher than the value of IV formulation, therefore, from the standpoint of the value-based pricing, the price can be set upwardly, which is supported by enough logic. Therefore, for SC-AI formulation, new BLA in the new category for new pricing will be progressed. So that is what we assume for SC-AI.

Regarding the submission and registration filing, I believe that includes the initiation treatment for SC-AI filing.

Nakahama-san or Owa-san, could you please respond to the question?

[Akiko Nakahama, executive]

Thank you very much for your question. My name is Nakahama. I am responsible for RA, regulatory affairs. SC-AI initiation submission has not been done yet. But for initiation, we are steadily progressing with -- in the discussion with FDA. We are exploring the optimal dose. We are discussing on this with FDA. And SC-AI maintenance treatment, we expect that approval will be granted in the first half of next year after getting that approval immediately, we will find the submission for SC-AI initiation. Thank you for your question.

[Hidemaru Yamaguchi, analyst]

So let me clarify. After getting approval for the maintenance and then you will start filing for the initiation.

[Akiko Nakahama, executive]

Well, we have already commenced the consultation with the regulatory authorities and PK/PD monitoring data and SC-AI real-world the administration data will be combined in submission. Therefore, there's almost the same methodology for filing will be done with the SC-AI maintenance. Therefore, the preparations are almost done. But the timing for the submission is after getting approval for SC-AI maintenance. We will switch to the SC-AI initiation filing, but we are aiming at getting approval by the end of fiscal year 2025.

[Unknown Executive]

Attendee seated in the front row.

[Seiji Wakao, analyst]

I'm Wakao from JPMorgan. I also have a question regarding infusion centers. To begin with, up until the first quarter, I believe the progress was according to the plan. But this time, infusion center is the rate limiting factor, infusion center contract was delayed. Is that the reason why or looking at the past 3 months? Infusion capacity is the limiting factor, and you have confirmed that there is a need to increase infusion capacity. At the end of the fiscal year, it will be 18,000 to 19,000 capacity. In next fiscal year, 26,000 capacity, but 26,000 capacity, how many patients can you administer annually?

[Haruo Naito, executive]

It is the same thing. Infusion capacity of 10,000 means that at that point in time, we are able to administer 10,000 patients. If we have 26,000 infusion capacity, at that point in time, we should be able to administer LEQEMBI to 26,000 patients. And as I presented, the overall demand is stimulated at a very fast pace. And if infusion capacity is not a limiting factor, more and more patients will be coming on to the pathway.

And Wakao-san, as for your first part of the question, in the end, right now, IDN -- large institutions, there are more sites that are treating about 300 -- as many as 300 patients per site. And infusion capacities are at full capacity, and we began to recognize this recently -- relatively recently, Mr. Haruna, could you supplement?

[Katsuya Haruna, executive]

Thank you. I'm responsible for LEQEMBI in the U.S. My name is Haruna. So your first question -- regarding your first question, at IDN, more patients are being prescribed LEQEMBI. And we also hear from IDNs about their desire to have off-site prescriptions -- prescriptions outside of their sites. Since last summer, and we have begun to enter into contracts with more. And we were able to complete that quickly and patients who are waiting are now beginning to receive infusion. And so these are the most recent developments.

[Seiji Wakao, analyst]

If that is the case, 26,000 infusion capacity, meaning 26,000 patients. I think that is still far short of what you're targeting. With the increasing demand, are you able to increase at a certain rate, infusion center number or less maintenance therapy or auto injection SC-AI approved. Is it going to plateau at a certain point in time?

[Haruo Naito, executive]

I think infusion capacity is used most by oncology. Most oncology patients receive infusion. Next is RA and it's buying for allocation of infusion capacity with these therapeutic areas. AICs are for-profit organizations. And if LEQEMBI infusion ensures greater profit then it's possible that there may be more allocation for LEQEMBI. Inclusive of that, we are reviewing contracts, revising contracts and entering into new contracts.

[Seiji Wakao, analyst]

So you expect to be able to increase infusion capacity. About the revised forecast, my final question. LEQEMBI sales was lowered in your forecast and Lenvima increased, but fixed cost others have remained unchanged. Lenvima increased, LEQEMBI decreased. When I look at these, LEQEMBI gross profit, I think is possible to be guessed. And that's the same as what I guessed in the beginning of the fiscal year, but I think it's lower than the ordinary antibody drugs.

I would like to understand if my estimate is correct. And next fiscal year onward, with the increase in demand, do you expect improvement in margin?

In manufacturing, I think there was a comment before on the past occasion, I would like to seek clarification this time again.

[Haruo Naito, executive]

Globally, LEQEMBI will start to contribute to profitability from fiscal 2026, as I have discussed before. And the U.S. will be turning profitable in fiscal 2025. But unfortunately, there is not a certainty.

There has been a delay as I described. So in the U.S., we believe that it will be turning into profitability in fiscal '26. But in China and in Japan, we would -- we will be turning to profitability in fiscal 2025. Fiscal 2025, LEQEMBI overall profitability in comparison to fiscal '24 should be much improved.

Globally, also in the United States, in fiscal '25, we had full field force deployment in fiscal 2023 and 2024. But after the establishment of the pathways, and we have completed most of the efforts needed to establish the pathway, and we believe that we will be able to reduce resources for that.

And therefore, in fiscal 2025, we can be more selective in resource expenditure and investments. And therefore, in fiscal '25, China, Japan, profitable. And in the U.S., unfortunately, 1 year later, but profitability should be improving. And in fiscal '26, we expect to turn profitable, including in the U.S. and globally.

[Seiji Wakao, analyst]

As for OP margin, I think there will be improvement, but about gross margin or can I expect improvement in cost of goods?

[Haruo Naito, executive]

Manufacturing cost, I take it that, that is your question. As for manufacturing, well, drug substance, drug product. As for drug substance, Biogen is producing. And as for drug product or formulation, we use a part of Biogen's plant, but after expansion of volume, we are able to use a third-party facility, and we expect to be able to use a third-party facility about the cost reduction.

[Seiji Wakao, analyst]

In a very rough manner, could you elaborate on that?

[田村 和彦, executive]

I am Tamura, responsible for manufacturing. As our CEO mentioned, regarding drug substance, right now, in Solothurn, Switzerland, a Biogen plant, drug substance is produced. This is a highly automated facility. And cost is being reduced by averaging. Yield improvement is expected based on the new process that is being developed, and we expect to be able to produce a lower cost. As for drug product, as CEO commented, we have concluded a contract with European CMO. Manufacturing has been started. And by using such CMO, we believe we should be able to control costs even better.

[Haruo Naito, executive]

As for drug substance, as Mr. Tamura mentioned, at the cutting-edge factory in Solothurn, Switzerland, it is being produced and the facility is run at full capacity. Also in North Carolina, Biogen has a factory in [indiscernible] Park Triangle -- Research Triangle Park, and we are planning to be able to use that. And that North Carolina facility has been depreciated and therefore, cost is lower.

And we would like to be able to increase the volume of batch produced there so that overall cost can be reduced. As for formulation, the third party, I think it's a German CMO, we already have contract with that CMO. So we believe we should be able to substantially decrease costs for drug product.

[Unknown Executive]

The person in the front row, please, have the floor.

[Kazuaki Hashiguchi, analyst]

My name is Hashiguchi. I'm from Daiwa Securities. Regarding your explanation of the status in the U.S. of the LEQEMBI, and you mentioned that the amyloid beta testing is not a limiting factor. And the BBM could be a key factor. And for those people who will receive the treatment and the impact on the sales will not be dramatically significant. Is this correct understanding?

And in Japan, you have already established a structure and organization. And out of those people who saw the consultation with doctor, there is only 3% or so of the patients who have initiated treatment. And in infusion capacity, limiting factor is resolved. And in order for you to increase the sales further and in top left of the Page 10 and 600,000 people, how you are able to increase that size further? For example, you may want to consider DTC usage, at which timing, what kind of measures are you going h implement?

[Haruo Naito, executive]

Hashiguchi-san, regarding your first half year question, have you ever received a PET test?

No? I have gone through PET tests many times. I do not intend to be confirmed on the amyloid beta negativity. But anyway, PET test is really burdensome for -- particularly for elderly people.

And of course, there is issue of exposure to radiation. So considering this risk and the cost considered, PET has been quite burdensome on the pathway. And turning to CSF, which could be invasive because you needed to stick needle and procedure can be done by a limited number of operators.

So for the current amyloid beta confirmative testing, PET CSF have become the burdensome procedures on the pathway, therefore, it is significant to reduce and streamline that part. And if the diagnosis can be done by PCP, if I may dare to refer to the currently popular obesity drugs, that is a CAI drug and the prescribers are mostly PCPs, and specialists are not prescribing.

PCPs or nurse practitioner in the United States, part of the nurses are allowed to prescribe. Therefore, that drug is prescribed by those professionals. And then the drugs can be -- can spread so quickly as we saw. So there is such a significance.

And regarding the second half of your question, as you said, now it has doubled to 600,000, and it's stuck and this issue bottleneck will be resolved soon. And what we -- do we need to do? There are 2 things. First is for PCPs in the United States, we need to support their increased knowledge or awareness about this disease.

And at the level of PCPs, they will be able to do certain level of diagnosis, Alzheimer's or Lewy bodies type of -- or cerebrovascular type of dementia. They will be able to diagnose to that level. And I think that the level of PCPs needs to be enhanced. That effort will be started from next fiscal year. The approach to PCPs will be started in the United States.

Once PCPs can obtain certain level of knowledge and then DTC will be considered. For example, through SNS, social networks, utilizing such media, we may consider data consumer campaign from 2026 onwards, and PCP approach will be started from FY '25 and in fiscal year 2026, we will consider starting DTC in the United States.

[Kazuaki Hashiguchi, analyst]

I have another question. With SC initiation treatment a little earlier, a smaller size trial was published, and there was an impression as shown by the data suggesting that slight increase in the ARIA incidence. And the efficacy of SC-AI is the equivalent to IV infusion. And before approval is granted in 2025, for such clinical question, do you think that there can be an additional clinical trial data to respond to such clinical questions?

[Haruo Naito, executive]

Ogawa-san, would you please respond to this question?

[Tomo Ogawa, executive]

My name is Ogawa. I am in charge of the clinical development in Japan and Asia. Thank you very much for your question. Regarding the SC initiation dosing in the clinical trials, it is for the administration is being tried. And in early next fiscal year, before submission is filed, we will be able to summarize the data. And based upon, which we will file for submission and then -- so that we can secure the delivery of the new formulation to patients. Thank you very much.

[Unknown Executive]

Attendee seated in the second row on the window side.

[Kasumi Haruta, analyst]

Haruta from UBS Securities. I also have a question regarding pathway in the U.S. And regarding the number of patients. You have shown that the number of patients is increasing but up to the PCP level. From PCP level to the time that it takes from PCP to the patient receiving administration, it seems that it takes about 6 months. But your efforts, how shorter can that be made?

And from informed consent to patients who are being administered, and there is also reimbursement procedures and other issues that need to be addressed. But can you broaden the funnel?

[Haruo Naito, executive]

From PCPs to neurologists, the patients who are referred and it takes about 6 months for a referral process. This process has been a time-consuming process, and this hasn't -- there hasn't been much change here, and quite a large number of patients who visited PCPs are being referred to neurologists.

Actually, referral rate in Japan is much lower. So the flow is such that it is left up to the specialists. And in AD diagnosis and treatment, we would like to utilize more PCPs. Because of this referral, neurologists are busier and we are also looking at referral duration. There has not been much improvement yet.

From informed consent to actual infusion, and was your question about simplifying this process? Mr. Haruna, can you address that question?

[Katsuya Haruna, executive]

Thank you for your question. I'm Haruna, responsible for LEQEMBI in the U.S. There are 20,000 patients who have given informed consent and then 10,000 patients have gone through reimbursement check with payer. This is cumulatively from January to September. And there are also patients who are giving informed consent who have yet to go through reimbursement check with payers. So the 10,000 people who have gone through reimbursement check, that number should increase.

I cannot give the number for the month of October but we have seen much increase. And in October, also a larger number of patients are receiving drug starting a new treatment. It is not that 10,000 have dropped off. From informed consent to reimbursement check, there are still patients who are transitioning phase between the two.

[Kasumi Haruta, analyst]

Second question is about CHMP status in Europe. After new reporter is named, do you think that you can expect things to be more positive in the U.K., excluding ApoE4 homozygous patients, indication was approved. And do you expect that direction may also be reviewed in positive fashion by Europe. And could you also discuss other regulators?

[Haruo Naito, executive]

With EMA, we have very good communication, and we have been exchanging data. ApoE4 homo patients, if they are excluded how will data look, including that and also new data for long-term treatment and what is happening in the real world. We have improved communication with the EMA and sharing that information, and we are responding to inquiries from EMA. That is the current situation.

[Unknown Attendee]

We would like to receive questions from the media. If you have any questions, please raise your hand. All right, the person in the third row from the front, please have the floor.

[Susumu Shimoyama]

My name is Susumu Shimoyama. I am a nonfiction writer. On Page 10, regarding the AD pathways in the United States on this diagram. First, people will see consultation with PCP. And then easy cognitive testing will be conducted and then referred to neurologists. 500,000 people will be referred to neurologists and MMSE and CDR testing will be conducted.

And then the number of people will be reduced to approximately 50,000 people and the remaining -- the 450,000 people are supposed to proceed -- progress to the moderate severity. So those people with moderate severity have seen PCPs in the first stage?

[Haruo Naito, executive]

Cerebrovascular dementia or DLD, well, so these 500,000 people include patients with various types of dementia. And out of which we narrow down to the patients with early AD, the number of people has reduced to this level. But cerebrovascular type or Lewy body dementia with Lewy body can be screened.

[Susumu Shimoyama]

Without PET CSF, I believe that PET CSF must be conducted to screen them out. So the reduction here to 500,000 people to 50,000 people. The progress -- the disease stages have progressed to later stages. The neurologists are capable of differentiating among those different types of dementia.

[Haruo Naito, executive]

You mean the progression?

[Susumu Shimoyama]

No. Cerebrovascular, the dementia with Lewy body and AD.

[Haruo Naito, executive]

Haruna-san, do you have any comments to add?

[Katsuya Haruna, executive]

Yes. Thank you very much for your question. So all of these are mild and moderate and the progressed patients are not included in these 500,000 people. Yes, all of these 500,000 people are patient with mild diseases. But as I said earlier, dementia with Lewy body and Cerebrovascular type of dementia are included -- therefore -- because PCP cannot differentiate them, therefore, at the cognitive testing, the first stage after referral to neurologists and other types of tests are conducted here. Therefore, differential diagnosis is given.

And then if the Alzheimer's disease, it was the diagnosis and then amyloid beta confirmatory testing will be conducted. So Alzheimer's disease is screened. Therefore, that's why the number has significantly reduced here.

[Susumu Shimoyama]

I'm sorry, again, Alzheimer's disease is diagnosed after the confirmation of the accumulation of amyloid beta through PET or CSF. After confirming the accumulation of amyloid beta and then Alzheimer's disease can be definitely diagnosed in my understanding. So according to your explanation, the decrease from 500,000 to 50,000, amyloid -- before amyloid beta confirmatory testing is done, is it possible to see whether patients are diagnosed -- should be diagnosed with the amyloid -- the Alzheimer's disease?

[Katsuya Haruna, executive]

Right. Amyloid beta confirmatory testing to screen and narrow down the eligible patient for LEQEMBI treatment.

[Susumu Shimoyama]

No, I understand that, that test is conducted to find the patients with Alzheimer's disease. But MMSE or CDR, the amyloid -- the Alzheimer's disease can be definitely diagnosis?

[Katsuya Haruna, executive]

BBM can be also utilized.

[Susumu Shimoyama]

All right. Because of the BBM utilization. I see, understood.

[Unknown Executive]

Would there be any other questions? Yes, participants seated in the back of the room, please.

[Unknown Attendee]

I'm [indiscernible] from Yomiuri Newspaper. I have a question regarding Japan. It's Page 19, around Page 18 or 19. In the pathway in Japan, according to what was presented earlier, there are about 600 in early AD diagnosis and treatment and 800 follow-up facilities have agreed. Is this moving part of the initial expectation? Or is this progressing according to your expectation? How should I understand the situation in Japan?

[Haruo Naito, executive]

OUG, Optimal Clinical Use Guidelines. Under the guidelines, it is almost in line with our expectation or slightly ahead of our expectations. We have to follow OUG, but without OUG, the pace could have been quicker. But there is no use in that. And Mr. [indiscernible], responsible for Japan business, could you make additional comments?

[Unknown Executive]

I'm [indiscernible], responsible for LEQEMBI in Japan. Our CEO, Mr. Naito responded, and as he responded under OUG, Optimal Clinical Use Guidelines. First, regarding the size of the patient population this year, in comparison to what we have reported to MHLW, it is slightly higher or almost in line. As for 600 facilities that are administering LEQEMBI, and 800 follow-up facilities, that number is also almost according to the plan.

But every day, the number of facilities is increasing, and it's close to 900 follow-up facilities as of October. So the number of facilities is also increasing every day.

[Unknown Attendee]

I forgot to ask this, but not just a number of sites, but are number of patients is also trending according to the plan?

[Haruo Naito, executive]

It is slightly ahead of the plan or expectations.

[Unknown Executive]

The person in the back row, please, have the floor.

[Unknown Attendee]

My name is Sakata of Yakuji Nippo. I have the similar question. You mentioned that you are progressing in line with the plan. 800 follow-up sites, they have consented to receiving patients. So receiving patients, there may be some bottlenecks. Could you please give us your take on potential bottlenecks?

[Haruo Naito, executive]

Thank you very much for your question. [indiscernible] is going to respond.

[Unknown Executive]

Regarding the reception of the patients, are there any bottlenecks? As you pointed out, not all the hospitals or sites are ready to receive patient for follow-up. It takes a burdensome workload. And once you receive 1 person, there needs to be 1 person to be assigned to watch and for general practitioners, particularly they needed to do some preparations.

And to health care professionals, we are asking them to bear their burden with the passion to treat patients with Dementia. Therefore, they agreed to receiving patients for follow-up. And the GP or hospitals fit -- the ratio between the GP and the hospitals who are open to receiving the follow-up patients are 50 to 50. Therefore, so many GPs are ready to receive those patients.

So as you pointed out, there are some issues, but we have specializing MRs or sales reps in the field. Therefore, they are trying to resolve the issues one by one in order to better the situation.

[Unknown Attendee]

So you mentioned that the number of hospitals, 800 has been increased to 900. So are there any things that they needed to prepare or having those requirements, they are ready to receive patients?

[Unknown Executive]

Right. For a patient to be increased we would like to see triple the number of sites who can receive. And towards that goal, we are making the steady progress. And then throughout the nation, if you look at the sum of areas, and there are some areas where we needed to do more in follow-up. For such specific areas, we will talk to the doctors who will be responsible for follow-up. And those who are responsible for initiation, as CEO mentioned earlier, we would like to have the exchanges of information through visits by the sales reps.

[Unknown Attendee]

We have gone overboard with the time. We would like to take one final question. Are there any other questions? If not, we would like to end today's financial results presentation session. Thank you very much once again for your attendance.

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