It is now time. We would like to begin financial results presentation for Q3 fiscal 2020 by Eisai Co., Ltd. The presentation is streamed live or broadcast over a telephone line. For those of you who are participating via telephone line, please go to our website and download the slides. Please click to advance the slide. That is not necessary for those of you who are watching live streaming. The first financial part will be presented by CFO, Mr. Ryohei Yanagi. The operation part will be presented by Ivan Cheung, President of Neurology Business Group, and Terushige Iike, President of Oncology Business Group. Ivan Cheung will present in English. If you wish to listen to Japanese interpretation, you are able to listen to simultaneous interpretation into Japanese. If you wish to listen to English, you will be able to listen to his original presentation.
First, financial part will be presented by Mr. Yanagi.
This is Yanagi, CFO speaking. I would like to report to you on the financial part. Please turn to page one. Here, you can see the consolidated statement of income for the third quarter cumulative numbers for FY 2020. Even though there was impacts by COVID-19 pandemic, we could achieve increase in revenue. Top line revenue was JPY 498.3 billion, up 3% from a year earlier. In Japan, there were impacts of revision of drug prices in Japan and foreign exchange rates. In line with the business development, global brands, centering on LENVIMA, have increased to achieve increase in revenue as a whole. LENVIMA, in particular, increased the sales by more than JPY 20 billion. Particularly, throughout the calendar year, from January through December, in LENVIMA, the total annual sales achieved the threshold of $1.2 billion.
JPY 200 million of milestones from Merck has been recognized in revenue. Cost ratio is low for LENVIMA, which grew significantly and which led to the improvement in the product mix. Cost ratio has improved to 24.1%. With this, core profitability, gross profit was JPY 378.2 billion, up 5% year-on-year. With increased revenue and improvement in core profitability, which have been achieved with the management will to increase the corporate value in the future, proactive investment is being continued. R&D expenses were JPY 108.2 billion, up 5% from the previous year, which accounts for 21.7% of sales. Major part of the increase was due to LENVIMA development and also next-generation Alzheimer treatment projects. For your information, reimbursement from partner is JPY 46.8 billion has been received. Actual expenditures in R&D were JPY 155 billion, accounting for 31.1% of revenue.
We have continued to be one of the global pharma companies most aggressively investing in R&D. On the other hand, our SG&A expenses were JPY 211.4 billion, up 12% from a year earlier. SG&A ratio has reaching a little bit of abnormally high level to 42.4%. This SG&A expenses include positive investment in LENVIMA, increased the cost of a shared profit with Merck of JPY 47 billion. Excluding that, SG&A expense ratio was almost 33%, therefore approaching the global average. SG&A expenses were increased by double-digit ratio, as I said earlier, shared profit over JPY 10 billion. About half of the increase can be explained by that, the remainder was due to the DAYVIGO launch preparation, as well as preparation for the future contributions to patients with AD, with next-generation therapies. Positive investments have been made.
Last fiscal year, there was a JPY 4.4 billion gain on the transfer of Elmed Eisai in other income and expenses, which is not recorded this year. Operating profit was JPY 57.7 billion. About 80% level of the last year's level, OP margin has been secured at a little less than 12%, double digit. OP of JPY 57.7 billion means that we could outperform business plan in OP as well. If you look at profit for the period, bottom line, there were extraordinary item last year to resolve the group's cash imbalance between Japan and the U.S. The paid-in capital was paid from a U.S. sub to the company. As a result, tax benefit of JPY 15.1 billion was recorded last fiscal year. Without such extraordinary factor, this fiscal year, about 20% tax ratio has been recovered. The profit for the period is JPY 45.2 billion.
Although, which stands at the 62% of the last year's level. Like in OP, this result for the profit for the period also outperformed the business plan. For the third quarter, ROE, average reference ROE was 8.9%, above the assumption of 8% for cost capital cost and securing positive equity spread and creating value. If you look at the items on balance sheet, net D/E was -0.20. We continue to have net cash position or debt-free status has been maintained. Having said that, as we saw in the investment, we regard this fiscal year as a year of investment. Almost double the number of the capital expenditure is being made in a capital equipment or IT or business development and so forth. Cash balance itself has been decreased.
Still, we have net cash of over JPY 130 billion, and equity ratio is about 65%, with the financial position, very strong position, and sound balance sheet has been maintained. For your information, this fiscal year, R&I Rating agency has upgraded us to double A-minus. With this financial integrity, we have been sustaining the proactive investment. This has been reflected in the results for the third quarter. Next page two. Here is the breakdown of our revenue migration on this waterfall chart. For the nine months of last fiscal year, revenue was JPY 486.1 billion. In Japan business, there were impact of COVID-19 and the revision of drug prices and the generics of Lyrica launched in the market. In Asia, there was the impact of termination of sales contract of HUMIRA.
In other regions, in Americas and China and Europe, centering on the growth of LENVIMA, we have been able to secure the increase in revenue. There were some ups and downs as factors in business development, but as I said earlier, $1.2 billion threshold was achieved for LENVIMA. We have been able to recognize the revenue of $200 million of reimbursement, the milestone from Merck. Revenue was increased by JPY 12.3 billion to reach JPY 498.3 billion. Please turn to next page three. Here is the breakdown of operating profit. For the nine months of last fiscal year, OP was JPY 73.3 billion. Centering on the growth of LENVIMA and other global brands, OP, it could be increased by JPY 23.9 billion.
In line with the revenue increase in those global brands, with the intention and will of the management, we have been making proactive investment, launch cost of DAYVIGO, JPY 13.1 billion, R&D cost of LENVIMA, JPY 1.7 billion, and LENVIMA's related share of profit, JPY 10.8 billion, and next generation AD treatment-related costs, JPY 14.3 billion. Such proactive investment has been made, OP was JPY 57.7 billion. As I said earlier, this number outperformed by large the business plan. In the box on your right-hand side, you see the breakdown of R&D expenses. As I said, on accounting basis, net R&D expenses were JPY 108.2 billion, there was JPY 46.8 billion reimbursement from partners. Actual expenditures was over JPY 150 billion at JPY 155 billion. We have been making the investment proactively for the creation of corporate value in the future. Next page. Here is the consolidated earnings forecast.
For this fiscal year, there has been a revision from the announcement made in May. Unfortunately, the revision was made downwardly, but as a summary, we would like to continue to make proactive investment to enhance corporate value in the future while maintaining a stable dividend through balance sheet management. This is the key message. First line, top line, revenue is expected to reach for JPY 647 billion, revised downwardly due to the impacts of COVID-19 pandemic, which has been prolonged and more serious than expectations. Impact was incorporated on the revenue line, and other competitive and market environment has been taken into account, and the largest factor could be related to LENVIMA. The yearly global sales projection was reported to you as JPY 158 billion in May. However, as we have been disclosed in the reference materials this time, revised to JPY 145 billion.
Another threshold for the last sales-based sales milestone, this threshold will not be reached because of this downward revision. Recognition of the last milestone from Merck shall be postponed from this fiscal year. Such milestone recognition will be postponed to next fiscal year onward. The milestone from Merck is recorded in this reference other business revenue segment. As you can see in reference material, JPY 59 billion is planned. Not only milestone, but the business development and export-import related items are included. As a segment, milestones are included in this other business revenue line. Regarding sales-based milestones for Merck, it does not mean that we will not lose the right to receive such milestones by the end of this fiscal year.
When conditions are met, we will be able to recognize milestone based on the pro forma agreed upon when the strategic alliance agreement was concluded with Merck. Such milestone was slated for FY 2021. The medium to long-term net present value generated by LENVIMA will not be significantly affected. Cost ratio will be improved to 24.4%, and gross profit is expected to be JPY 489 billion. R&D expenses, SG&A expenses, as I have said, will be proactively invested for increasing the corporate value in the future, and operating profit on a full year basis will be JPY 52 billion. In parallel with the changes in the revenue, there will be the changes in the OP. The single and the largest factor would be the sales-based milestone to be postponed. Support owners of the parent is expected to be JPY 39.5 billion.
The value creation KPI, EPS, ROE, DOE, are calculated as these. ROE 6% level after revision. Regarding the value creation for the company, we would like to pursue this KPI over several years. This means that 5-year average ROE is expected to be over 10%. We will secure enough ample equity spread, and based on the current volatility, the shareholder capital cost is increasing. Such assumptions can be offset, and we will not fall into short-termism, but we will manage the business with the long-termism. 160 dividend, 115% will be the payout ratio. Long-termism, 5-year average payment ratio will be less than 70%. JPY 130 billion over cash positioned and also net cash is reflected as the strong balance sheet. We'd like to continue to have stable dividends through balance sheet management. This concludes my report on the financial section.
Next, I'd like to ask Ivan Cheung to explain Neurology Business Group.
This is Ivan Cheung from Neurology Business Group. Today, I'll provide an update on the important progress of our neurology franchise with a special emphasis on Alzheimer's disease. On slide five. Alzheimer's disease has been called an invisible pandemic, threatening to be more devastating, long-lasting, and costly than COVID-19. We believe it's critically important that Alzheimer's disease remains a top healthcare priority next to COVID-19, and that patients are not overlooked during and beyond the current viral pandemic. As you can see on the left-hand side of the slide, by 2050, one in six people in the world will be over the age of 65, and the total number of people with dementia is projected to reach 152 million, three times more than the current number.
Nearly 60% of people with dementia are currently living in low and middle-income countries, and this number is projected to rise to 71% by 2050. The worldwide cause of dementia was approximately JPY 90 trillion in 2015, and if dementia was a country, it would be the world's 18th largest economy. On January 25th, as you can see on the right-hand side of the slide, our CEO, Dr. Naito, joined the panel Tackling Alzheimer's at the World Economic Forum's Davos Agenda 2021 meeting to discuss the need for global collaboration to fight the challenges with Alzheimer's disease and shared Eisai's vision to bring effective solutions to patients and families worldwide. Specifically, Dr. Naito emphasized the importance of not only patient participation, but also people participation to promote preventative actions for brain health, such as healthy sleep, diet, exercise, as well as brain performance checkup.
To this end, digital technologies can offer smart and accessible solutions which could be used in low and middle-income countries as well. Considering the enormous socioeconomic impact of the Alzheimer's disease crisis, we need public-private partnership to come together in finding solutions, in particular, as we get ready for the upcoming arrival of the first disease-modifying therapy. On the same day on January 25th, the Davos Alzheimer's Collaborative, DAC, was officially launched, modeled after similar healthcare initiatives catalyzed by the World Economic Forum, such as the Global Alliance for Vaccines and Immunization, GAVI, and the Coalition for Epidemic Preparedness Innovations, CEPI. The DAC is bringing together governments, academia, NGOs, and partners from various industry sectors in a broad public-private partnership. We at Eisai are proud to be part of this first-of-its-kind global effort. Next slide.
Slide six, please. As you saw from last Friday's joint press release with our partner, Biogen, the U.S. FDA has extended the PDUFA action date of the aducanumab BLA by three months to June 7 of this year. We're encouraged by the ongoing communication between the FDA and Biogen. As part of the ongoing review, Biogen submitted a response to an information request by the FDA, including additional analyses and clinical data, which the FDA considered a major amendment to the application that will require additional time for review. We very much appreciate the FDA for its continued diligence during this review. We very much look forward to continuing to work with the FDA as it completes its review of the aducanumab application.
The aducanumab application is also under review by the EMA in the EU and by the PMDA here in Japan, where Biogen submitted the jNDA to the MHLW on December 10th of last year. In addition, we are continuing to conduct regulatory discussions with other health authorities and continuing to enroll eligible patients into the EMBARK redosing study. Together with our partner, Biogen, we are ready to launch potentially the world's first disease-modifying therapy for Alzheimer's disease in the United States, and we are continuing to ramp up our launch preparations in other key markets such as Japan and Europe. Next slide seven, please. Let me now turn to lecanemab, or BAN2401. First of all, with regard to Clarity AD, our phase III program in early AD subjects, we had already closed screening of patients last month and will be completing randomization shortly.
We're on track for data readout by the end of Q2 in FY 2022 as scheduled. We've been in consultation with the FDA proactively concerning the impact of those patients who temporarily missed doses during the initial wave of COVID-19 last year, before we fully put in place our telemedicine and home infusion infrastructure for the study. We thoroughly reviewed the FDA guidelines for addressing COVID-19 related issues in ongoing clinical trials and recently received valuable advice from the FDA to implement a sample size increase of approximately 200 subjects to potentially mitigate the impact of those missed doses from last year so that we can ensure the highest quality of data for the primary analysis for this single pivotal trial. As such, target enrollment number has been expanded from 1,566 subjects to 1,766 subjects.
Please note that this change was implemented without any knowledge of clinical results from Clarity AD. We believe we have proactively navigated the tremendous progress of this study over the past year and expect randomization to complete shortly to stay on track for data readout by the end of Q2 fiscal year 2022. Next slide eight, please. Another ongoing study for lecanemab is Study 201-OLE, open label extension. After the core study of Study 201 ended, and after a gap period of no treatment for about two years on average, we were able to redose 180 subjects from the core study into the OLE study to the highest dose of 10 mg/kg biweekly, irrespective of what they received during the core study.
Over a year ago, we presented the baseline data from Study 201-OLE, as you can see on the left-hand side of the slide, which indicated that brain amyloid beta reduction at the end of the core study persisted after lecanemab discontinuation. More importantly, the separation in CDR Sum of Boxes between lecanemab treatment and placebo at the end of the core study appeared to be maintained after lecanemab discontinuation. Recently, at last November's CTAD, we reported amyloid PET findings and incidence of ARIA-E after 12 months of treatment by the highest dose of 10 mg/k g biweekly in the OLE study.
You can see on the right-hand side of the slide that for those subjects who received placebo during the core study, now receiving the highest dose of 10 mg/ kg biweekly in the OLE study rapidly drove a vast majority of them to reach amyloid negativity. This data reaffirmed the potency of the dosing regimen of lecanemab 10 mg/ kg biweekly with no titration, as seen in the core study. Moreover, for these same subjects, the Kaplan-Meier estimate for ARIA-E incidence is about 10%, which is consistent with a rate of 9.9% observed during the core study. This data reaffirmed the low incidence of ARIA-E of lecanemab, 10 mg/ kg biweekly at approximately 10%. Overall, we are very encouraged that these data from Study 201-OLE, both at baseline and at 12 months of treatment, support the favorable efficacy and safety profile of lecanemab. Next slide nine, please.
The third ongoing study for lecanemab is the AHEAD 3-45 phase III program in preclinical AD subjects in collaboration with ACTC. Enrollment is now ongoing both in the U.S. and Japan, and we're making very good progress in site selections in a number of other countries, as you can see on the slide. During the CTAD held in November of last year, Dr. Reisa Sperling, one of the leaders of ACTC, presented the clinical study design of AHEAD 3-45 and the initial screening results of participants. To recap, AHEAD 3-45 is a platform study with a shared screening protocol to randomize subjects into two sister trials of A3 and A45, spanning from early to late preclinical AD. A3 enrolls participants with intermediate or sub-threshold amyloid, aiming to delay brain amyloid beta accumulation. A45 enrolls participants who are brain amyloid beta positive, aiming to reduce the risk for cognitive decline.
Dosing regimens are tailored for A3 and A45 respectively, based on amyloid burden at baseline. We're also implementing amyloid PET and tau PET for all subjects, and we're also implementing a broad biomarker panel to measure changes of CSF and blood biomarkers. As I mentioned earlier, Dr. Sperling presented the initial screening results of participants, which showed that the ratio of randomization into A3 and A45 was in line with expectation. We look forward to continuing our close collaboration with ACTC to ramp up enrollment into AHEAD 3-45 globally, as we believe lecanemab has an optimal efficacy and safety profile to benefit this very early population. Next slide 10, please. In addition to aducanumab and lecanemab that target the aggregated forms of brain amyloid beta, we have two additional disease modification therapies in clinical development to tackle the Alzheimer's disease continuum.
E2814 is our novel anti-MTBR tau antibody that we believe may emerge as the best-in-class anti-tau therapy, specifically for Alzheimer's disease. In Alzheimer's disease, it's believed that the propagation of tau pathology is mediated by tau species containing the MTBR fragments. E2814 is uniquely designed to capture extracellular MTBR tau fragments to prevent accumulation spread of tau seeds. At last November CTAD, we reported the result of the phase I single ascending dose study. Single IV doses of E2814 were well-tolerated in healthy volunteers. Clinical PK and CSF penetration were reasonable, and target engagement of E2814 binding to MTBR tau in CSF was demonstrated. E2814 is now in the multiple ascending dose study, and we plan to move E2814 into phase II clinical development next fiscal year. We are very excited about the prospect of this unique E2814.
E2511 is our novel synapse regenerant that selectively binds to TrkA without activating unwanted pathways induced by NGF. E2511 is a unique first-in-class molecule that targets the underlying pathophysiology of Alzheimer's disease through two mechanisms. One is by restoring damaged cholinergic neurons to functional cholinergic neurons. The other one is by preventing cholinergic degeneration. E2511 is now in a phase I single ascending dose study. We're equally excited about the prospect of this very unique molecule. Next slide 11, please. Meanwhile, the landscape for simpler diagnostic methods for Alzheimer's disease is also progressing rapidly, which is critical to address a chasm in our society with the upcoming arrival of the first disease-modifying therapy. We are working closely with our partner, Cogstate, to introduce Cognigram, a digital cognitive testing tool around the world.
We are particularly excited to see the recent advance of amyloid beta blood test, such as a Shimadzu screening test in Japan and a C2N screening test in the United States, which are both based on mass spec technology. At Eisai, we're working closely with our partner, Sysmex, to develop an amyloid beta blood test using Sysmex's HISCL system, which we believe holds tremendous potential to realize a low-cost and quick turnaround test. As I mentioned earlier, nearly 60% of people with dementia are currently living in low and middle-income countries. A simple blood test will be extremely helpful for these communities. We'll continue to strongly support the advancement of next-generation diagnostic methods, not only amyloid beta, but also p-tau and other pathophysiological biomarkers, so that disease-modifying therapies could truly benefit millions of Alzheimer's disease patients around the world. Next slide. Slide 12, please.
This is my last slide, and please allow me to reiterate Eisai's long-term commitment to transform diagnosis and treatment in neurodegenerative diseases. Firstly, we believe disease diagnosis could be redefined based on underlying pathophysiology instead of clinical symptoms. For example, Alzheimer's Disease could be redefined as amyloid beta aggregate-induced neurodegeneration, with further sub-classification based on additional biomarker footprint, such as tau. Secondly, we believe disease continuum could be redefined based on changes in pathophysiological biomarkers instead of severity of clinical symptoms. For example, the Alzheimer's Disease continuum could be redefined based on changes in amyloid beta, tau, and other important biomarkers instead of changes in cognitive performance. Thirdly, we believe treatment option could be redefined based on modifying root causes of diseases instead of addressing clinical symptoms. For example, treatment selection could be redefined to correct amyloid beta accumulation, tau propagation, and synaptic dysfunction.
We're confident that Eisai will be the leading company to drive medical and societal contributions to both people at risk of, and patients living with neurodegenerative diseases. Thank you very much for your time today. Let me now turn the presentation over to Mr. Iike.
Next, oncology business presentation will be made by Mr. Iike.
Please turn to slide 13. This page is on LENVIMA, and I will also discuss pipeline in oncology business. As shown on the left part of this slide, LENVIMA revenue has reached JPY 103.8 billion in total, which was 29% growth year-on-year. There was an impact from COVID-19. This fiscal year, contrary to our expectation that accelerated approval designation will be given to HCC treatment in combination for KEYTRUDA. The designation was not granted, which resulted in delay. In the United States, we see growth in endometrial carcinoma, renal cell carcinoma. Last year, at the end of the year, LENVIMA was added to national reimbursement drug list in China. Considerable increase in patient access is expected, and Eisai is hiring additional medical representatives. With virtual promotion in Europe, 31% growth was achieved.
In Japan, we are making contribution to HCC area through LENVIMA for patients who are ineligible for TACE. Slide 15, showing additional indications for LENVIMA are shown at left. LENVIMA monotherapy for thyroid cancer was approved in China last year with the results of phase II study that was conducted in China. Approval was given in November last year. LENVIMA monotherapy is under review in Japan for thymic carcinoma. As shown in the box on the right side, in combination with KEYTRUDA in renal cell carcinoma, three major endpoints were all met, and we are preparing for regulatory filing. The details of this phase III study will be presented at ASCO GU on February 13. Oral presentation will be given. As for endometrial carcinoma in the U.S., breakthrough therapy designation is already given, and validation study for that was conducted. This phase III study was successful.
Results will be presented at SGO in the U.S. in the plenary session on March 19. Oral presentation will be given. Globally, we are preparing for regulatory submission. In the box below that, gastric cancer, first-line phase III study is to be initiated in combination with chemotherapy. We have agreed with Merck to initiate such a study. In basket trial, sample size is expanded, taking into consideration possible application for accelerated approval designation. Pancreatic cancer was also added. Pediatric program is also underway. Slide 16. LENVIMA/KEYTRUDA combination in LEAP study. Status is given on this page. In the middle of the slide, towards left of the slide, results for endometrial carcinoma and RCC are shown. Combination of LENVIMA and KEYTRUDA yielded positive results. These are the first and the second phase III studies. Positive results were obtained from both studies.
As shown in the right-hand side in the large box, there are more than 10 studies underway, which are pivotal studies. For HCC, as I've mentioned earlier, with the single-arm phase II study, we were hoping that breakthrough therapy designation will be given. This was not the case, phase III study, 002 study, had already completed patient enrollment last spring. As for lung cancer, non-small cell lung cancer, first-line 007 study completed enrollment of patients. There is yet another LEAP-006 study for lung cancer in first-line setting. This will soon complete enrollment of patients. The third study on lung cancer, 008 study, is also making steady progress. Overall, we were able to minimize the delay of the trials due to COVID-19, and we are making good progress towards achieving JPY 500 billion level revenue in FY 2025. Next, slide 16.
From the pipeline, breast cancer-related two themes are picked up on this page. At the top is H3B-6545. The name of the class of drug is SERCA. This is an oral drug with novel mechanism that binds with estrogen receptor with covalent binding. 6545 has been evaluated in around 130 breast cancer patients thus far. Hormone receptor mutation is said to be potentially related to treatment resistance. Amongst various mutations, highly frequent poor prognosis type of mutations are seen in some of the patients, and we have high expectations that 6545 will be effective in such patients. Below the slide, E7090 is shown. Under Sakigake designation, development is underway for cholangiocarcinoma, and we have also made progress in pre-clinical study in breast cancer. In CDK4/6-resistant breast cancer patients, it was reported that expression of FGF and its receptor are elevated according to clinical data.
In breast cancer, clinical study in combination with hormone therapy was started. Slide 18. This shows pipeline in oncology area. I apologize that this slide is very busy. In red box in the middle part of the page, endometrial carcinoma LENVIMA-KEYTRUDA combination, and also in the middle of the page in red box, RCC are shown, and these are globally preparing for regulatory filing. As for E7438, tazemetostat, this is expected to be Eisai's first-ever precision medicine. In Japan, we have already filed submission. Below that, E7777, and brand name is Remitoro. This is also under review, and the second committee on drugs has decided to give approval. Next, slide 18. This shows the pipeline of next-generation candidates.
Individual patients have different characteristics in terms of cancer characteristics. Those characteristics may be understood at genome level eventually to address concerns of the patients based on genome information, early diagnosis, and tailored therapy for each patient will be a key. From blood sample to analyze cancer-derived DNA and genome at our Tsukuba Research Institute, liquid biopsy lab was established. In the middle of the slide below the green box, some of the focus programs are shown. As cancer signal pathway, VEGF as well as WNT and FGF are considered very important. For LENVIMA has rich clinical data. We have accumulation of human biology data related to these pathways. WNT and FGF are associated with a resistance to LENVIMA and immune oncology. When we think about beyond LENVIMA, such experience and information will be essential.
We also consider protein degrader to be one of the important pillars. In partnership with Bristol Myers Squibb, we are conducting research on neoantigen inducer. For this research, our group of compounds that affect splicing will be utilized. With our capability in chemistry, we would like to transform undruggable targets to druggable targets. We would like to make contribution to precision prevention and curing cancer. We would like to ask for your continuous support. With that, I would like to conclude my presentation.
Lastly, the presentation will be summarized by Mr. Yanagi, CFO.
This is Yanagi, CFO. I would like to make an overall statement before we end our presentation. Please turn to page 19, the last slide. As we have presented thus far, Eisai is at a very important moment. In order to elevate future enterprise value, we have to seize huge opportunity that is in front of us.
To achieve that, we are determinedly implementing investment for medium to long-term future in AD DMT to make contribution to Alzheimer's disease in the next generation. In oncology, lead studies are underway. With DX, we will be conducting business transformation. These are very large projects. To support these projects, to have strong balance sheet will be crucial. Based on soundness and integrity of the balance sheet, we aim to allocate capital in appropriate way and make active investment and achieve stable dividend at the same time to maximize patient contribution and corporate value. This will be in line with our mission and purpose. Right now is the moment to implement advanced investment for the future. After the fact, corporate value should be created. Rather than falling into the trap of short-termism, we should follow long-termism and create enterprise value.
For example, based on the target such as 10% ROE. We would like to ask for your continued support.
Thank you very much for your kind patience. We will now entertain questions. We would like to first take questions from participants over the phone line. Please press asterisk and number one. Please press asterisk and number one if you have question.
First person to ask a question from Nomura Securities, Mr. Kotani. Kotani-san, can you hear us?
Yes. This is Nomura Securities, Kotani speaking. Can you hear me?
Yes.
My first question is related to aducanumab. On the November 6th, advisory committee was held. Rather than discussing the medical side, but also they were focusing on the statistics, and I think the result was unfortunate. This still means that the approval was denied, and even if it is approved, but with the label of not being effective as a medicine by experts. Generally speaking, what kind of data will be convincing enough? Now, EMBARK study, redosing phase III study for aducanumab is ongoing. On page six, additional clinical data was submitted. Other than this trial, I don't think that there are any other clinical data than this EMBARK study. I think that the data from this EMBARK study was submitted.
I'm not asking about the details of the data, but personally, tau PET to see the reduced brain amyloid or tau in a plaque from the hippocampus and limbic system, at least those are the knowledge gained by the physicians. If the tau is reduced in brain, I think that they must think that it is effective. On the contrary, Alzheimer's disease, tau. Do you think that the tau can disappear spontaneously?
Thank you for your question. From Neurology Business Group President, Ivan Cheung is going to respond.
Thank you very much for the question. We agree with you that tau is a very important marker to look at in Alzheimer's disease trials. I believe Biogen had presented several times about the tau PET findings from the phase III program of aducanumab. As we've stated previously, we continue to stand behind the efficacy and safety of aducanumab as presented in the positive Study 302, the supportive Study 103, and we understood very well what happened to Study 301. Thank you very much.
Are you satisfied? Do you think that tau can possibly disappear spontaneously?
All these aggregates, production and aggregation clearance are controlling the aggregation of these tau or synuclein and Alzheimer's and tauopathy. Such system for disappearance is now damaged. Therefore, if the disease takes a natural course, those agents will continue to aggregate, as Kotani mentioned, with the medication, tau will be reduced. This should be thought to be the effect of the medicine.
Understood. The second question, this is my last question, which is about LENVIMA. Now, for RCC, the first-line CLEAR study results will become available, OPDIVO, YERVOY, and KEYTRUDA, Cabometyx and competitors are launching. Inlyta, Cabometyx will be the control, in my opinion. Before this, I would like to organize my thinking. For RCC data, how to interpret. In CLEAR study, LENVIMA and the KEYTRUDA, ORR over 50% on OS over 50 months. This should be the minimum, ORR over 70%, OS over 60 months.
I think it will be pretty favorable results. Is this correct understanding? In compared to Inlyta and Cabometyx, I think discontinuation rate is almost 30% because of the toxicity for both agents. I think that below that threshold will be also important. How to interpret the data for RCC? Do you think my understanding is correct? This is my last question.
Thank you for your question. Regarding your question, I would like to invite Oncology Business Group, Dr. Owa, who is in charge of science, will respond.
Thank you very much, Mr. Kotani, for your question. Rather than me responding to your question, I think the points you have raised are all very important. If I may repeat, response rate is very important.
This is to be used in first-line, so how much regression of tumor can be seen, how powerful it will be in reducing the tumor mass, it will be encouraging to patients. As you said, complete response rate does matter as the key opinion leaders of the RCC area. I think that that's all you understand, Mr. Kotani. Response rate and complete response rate in particular. In this first-line, there are some agents which have demonstrated survival benefits. Survival benefits, extension of OS, not only PFS. What are the expected level for these indicators, which are also important, not only extending survival, but also without having discontinuation? Can patients continue to be on the therapy for a long time? Please pay attention to the presentation to be made at ASCO. Thank you very much.
Next question is from Mr. Yamaguchi, Citigroup Securities. Mr. Yamaguchi from Citi, can you hear me?
Yes, I can hear you. Can you hear me?
Yes. Please go ahead.
I have two questions. First, it's about significant downward revision and the cause of that milestone of LENVIMA. From where to where and how much? That is not disclosed externally. JPY 1.2 billion from January to October, and I think our next threshold for full year, JPY 150 billion. Next year, if it exceeds JPY 150 billion, and I naturally expect that it will exceed JPY 150 billion, then JPY 50 billion milestone or thereabout will be paid. In later years, I believe that there were other milestones. Will you receive double milestones? If a sales is delayed, it may also be delayed, but milestone payment for next year, how will it be accounted for? As for the future milestones, can you share some thoughts on that, please?
Thank you for your question. CFO, Mr. Yanagi, will respond.
This is Yanagi, CFO speaking. Mr. Yamaguchi, thank you for your question. As you are aware, this is not a business that is carried out by Eisai single-handedly. We have a partner. As for a disclosure, for the term that is ended in our financial reports, milestones, threshold, and the amount received are disclosed, but for future milestone, the threshold and the amount of milestone itself are not disclosed. However, a large amount is expected, and the amount was deferred to next year and beyond, and that is one of the reasons for the downward revision. The milestone information is included in segment information in the reference section in the change in other businesses, and the movement will be in parallel with that movement. Please make estimate based on that. It's not that we have lost the right to receive a milestone in fiscal 2021.
If a certain thresholds are satisfied, then full amount of milestone will be paid. As for the business plan for the next fiscal year, plan is now being developed, and I cannot discuss this in precise terms, but there will be milestones in the future. In next fiscal year, there is Of course, the possibility that multiple milestone payments may occur. Once again, this is based on the partnership with Merck. Milestones that had already been paid are disclosed as information, but we are not able to disclose the information regarding the future milestone.
Thank you for that. The second question, I wonder, this is an appropriate question myself, but I feel compelled to ask this question. About three months extension of aducanumab. Information request was made by FDA and further analysis and clinical data were submitted to FDA. Specifically, what was done? As a result of that, PDUFA action date was moved from March 7 to June 7. Is that so that FDA can be more confident in giving approval? Are you also growing in confidence? It may be difficult to comment, but I would appreciate if you could share some information.
Ivan Cheung will respond.
Thank you for a very important question, I understand. Let me say this. Both Biogen and Eisai, we continue to be very encouraged by the ongoing communication with the FDA on this application. As I said earlier, we very much appreciate the diligent efforts by the FDA on this application. As part of this ongoing review, this is an important request from the FDA that the Biogen team, I must say, in a very timely and diligent manner, put together the responses, including additional analyses and clinical data for this response. As I mentioned many times, we continue to stand behind the efficacy and safety of aducanumab, and our belief in aducanumab remains the same with this PDUFA extension to June 7th of this year. Thank you.
Are you satisfied, Mr. Yamaguchi?
Yes. Thank you very much.
Next person is from JPMorgan Securities, Wakao-san. From JPMorgan Securities, Wakao-san, can you hear us?
Yes, this is Wakao speaking. I'm from JPMorgan Securities. I have two questions. One is as a follow-up question to the previous one. There has been extension of PDUFA date by three months. Do you think that there is possibility that this will be further extended? Because the analysis is done and additional information has been provided in response to the request, there will be extension of three months in review, do you think there is a possibility of further delay or extension? Are you submitting the additional data to other regulatory authorities, FDA and in other regions? I think the review is separately being done. FDA has extended PDUFA date, it's not relevant to other regulatory authorities.
Thank you for your question. Ivan Cheung is going to respond.
Thank you for your questions. Of course, this is the FDA's regulatory review process. As where we stand today, we do not believe there's going to be further extensions by the FDA. We have confidence, as I mentioned earlier, in the diligent efforts of the FDA in this application. Everything has been very timely over the past few months. I don't have any reason to believe that any further extension beyond three months by the FDA. That's where we believe. With regard to your other question on the other health authorities, we are under review by the EMA and by PMDA. Those processes are ongoing in terms of dialogue with those agencies. As always, the sponsor and the agencies are going back and forth with queries and questions and answers.
Of course, all the data and analyses that we have in our hands, depending on the queries and questions from other authorities, we will, of course, respond in a timely and diligent manner as always. Thank you very much.
Wakao-san, are you satisfied?
Yes, thank you very much. Regarding the second question about LENVIMA, I think that you have a downward revision by about JPY 73 billion. Accelerated approval was not obtained, also impacts of the COVID-19 for the HCC. A downward revision was made by JPY 70 billion. Is this because mainly by not being able to get the approval for HCC? How should we look into the outlook going forward?
Regarding this question, President of Oncology Business Group, Mr. Iike, is going to respond.
Thank you very much for your question. The COVID-19 impact, not limited to LENVIMA, but so-called overall business of Eisai, we believe that there will be impact of 7% downside impacts compared to the business plan. The impact for LENVIMA is also in line with that.
Regarding the approval for HCC, hepatocellular carcinoma, originally, when we started the alliance with Merck, such accelerated approval was not factored in. This year, we incorporated in our plan as an upside for this fiscal year. Such accelerated approval was not granted. Therefore, compared to the business plan, this part has been the downside, making it behind the plan. As you know, in this indication, there are competitors being launched, so there was such impact as well. That's what we can respond to. Thank you.
Thank you very much. That's all I have. We have gone beyond the scheduled time, but we would like to continue to take questions. Next, we have question from Mr. Hashiguchi of Daiwa Securities.
Yes. Thank you for taking my question. This is Hashiguchi. I have a question on aducanumab. The additional analysis and clinical data are now being reviewed. Will there be another advisory committee meeting?
Thank you for your question. Ivan Cheung will respond.
Thank you for the question. This PDUFA extension means that aducanumab is still within the current review cycle. The advisory committee for this review cycle already occurred last year on November 6th, as you know. Therefore, we don't believe so. I would just say this one more time, that advisory committee recommendations are non-binding and the FDA makes decisions to approve drugs independently. Thank you.
Mr. Hashiguchi, does this address your question?
Thank you very much.
One last question. Morgan Stanley MUFG Securities, Mr. Muraoka.
Thank you for taking my question. This is Muraoka. About aducanumab, the preparation for launch, in terms of expenses, I think it was JPY 14.3 billion in nine months. I have a question related to this. I think it will be in excess of JPY 20 billion for full year. With Biogen, I think about JPY 40 billion will be spent. If it is launched in June next year, is there going to be a significant increase in spending in comparison to this fiscal year? Launch spending seems to be very large, even though the product is yet to be launched. Could you elaborate on in what the spending is made?
Ivan Cheung will respond.
Thank you very much for your question. As you know, this, if approved, will be the first so-called disease-modifying therapy for Alzheimer's disease. That means we have to put a lot of efforts between both companies to make sure that the market and the healthcare infrastructure are in place for this to happen. For example, you've heard from Biogen several times, in the U.S., a lot of efforts are being put in place in the past many months in making sure that hundreds of sites, hospitals, health systems in the U.S. will be ready to prescribe, administer aducanumab and also monitor the patients and understanding how to take care of the patients, get reimbursement. These are very important efforts that do come with expenses when you launch a drug that is first in class, that will have to reshape the market.
We believe those expenses were very justified and necessary, to be able to really transform a very important disease area. Thank you very much for your question.
Mr. Muraoka, does this address your question?
Thank you very much.
We have run out of time, unfortunately. We would like to conclude today's presentation session.