Thank you very much for taking your time to attend the financial results briefing session by Eisai. It is now time. We would like to begin the briefing session by Eisai on financial results and business updates for fiscal 2024. Those of you who are in attendance in person, please find materials, including the deck of presentation and flash report. Those of you who are virtually attending, please find these materials on the website. Let me introduce the speaker, Mr. Haruo Naito, Representative Corporate Officer and CEO.
Now, we would like to report on the financial results for fiscal year 2024. First, let us share with you the P&L for FY 2024. Revenue and profit, both, while we continue to invest resources into Leqembi, have achieved an increase in both revenue and profits.
As we have already announced, the forecast for FY 2024, but both revenue and profits exceeded that forecast. If you look at this table, cost of sales increased by 0.5 percentage points. This is due to what is described above, other business or one-time decrease of revenue, which increased the cost of sales ratio. If you turn to the expense side, R&D expenses accounted for the ratio, which was reduced by 1.6 percentage points in terms of its ratio to the revenue, mainly in the United States or research laboratories outside of Japan. There were some inactive research laboratories or obsolete research laboratories that were decided to be closed, but among the themes of research were drops or with some impairment losses. Absorbing those, R&D expense ratio to revenue was reduced by 1.0 percentage points.
ST&A expenses increased by 1.2 percentage points because we continued to invest resources into Leqembi, particularly marketing resources were invested in this ST&A expenses, which includes expenses related to the structural reforms in the U.S. that were carried out during the year under review. There was a temporary increase in expenses related to the U.S. structural reform, which are related to the termination benefits. Such increase was absorbed to control ST&A expenses, whose increase was controlled within 1.2 percentage points. Now, turning to the revenue migration, we have three global brands, three Ls, Lenvima, Dayvigo, and Leqembi. In total, these three global products, as you see, have achieved JPY 426.5 billion, while the year-on-year increase was 24%.
What contributed most to the growth was the increase of JPY 40 billion in Leqembi and a JPY 30.8 billion increase in Lenvima, and a JPY 12 billion increase in Dayvigo. In the overall pharmaceutical business, revenue increased by JPY 57.6 billion. In the bottom half, we described one-time income or changes from the previous term, which was minus JPY 9.9 billion. As you see on the left-hand side, we achieved 106% of the previous year by an increase of JPY 47.6 billion to reach JPY 789.4 billion in revenue. Next, turning to the operating profit migration. In pharmaceutical business, by proactive investment into Leqembi, although we continued such proactive investment, we could achieve an increase in OP by JPY 26.3 billion in pharmaceutical business.
Turning to R&D business expenses, as I said earlier, as you see on the right, BB1701 impairment loss was recorded, which increased the profit by about JPY 0.7 billion. Payment of a shared profit of Lenvima to Merck, in accordance with the expansion of the Lenvima business, increased as such. Other businesses included upfront payment and others, and we achieved JPY 54.4 billion in operating profit, which was up 2 percentage points from a year earlier. Now, let me share with you Leqembi situation. This was carried in the local TV program in Boston in the United States, which featured Boston Marathon. There is a runner in blue uniform who achieved the full marathon running, and this continued with the interview with him. This person participated in the Leqembi lecanemab clinical trial.
As you see here, he is a man from Portland in Maine, about 100 mi away from the hospital in Boston. He continued to visit that hospital biweekly for about 10 years. He could run through the whole distance of the marathon, after which he was interviewed. During the clinical trial, he did not know which of the placebo or active drug was administered, but there were various improvements in the daily activities, as reported by caregivers. After that, in 2023, FDA approved the drug. He realized that the drug he was receiving was actually Leqembi. In the media coverage, he made that comment. As shown in this case, there have been various reports on improvements in the behaviors or activities of daily living.
For example, the patients are now able to go for shopping in the neighborhood, or they have been able to start enjoying hobbies. These are called humanized messaging, CDR-SB. And not such a clinical endpoint, but rather there have been reports on the improvements in activities of daily living. There are also increasing numbers of such reports in the medical side and the SNS or social media. Both in Japan and the U.S., such number of reports are increasing in number recently. For Leqembi, in Europe, Leqembi was approved in Europe, 27 countries in Europe plus 3, and in total, in 30 countries, Leqembi has been approved. More recently, in the Middle East, Leqembi was approved as well. So currently, today, in 44 countries, it is approved, and it is under regulatory review in 12 countries. In 44 countries worldwide, Leqembi has been approved.
Therefore, Leqembi has achieved global reach and is making steady progress toward a truly global drug. Now, turning to the approval in Europe, as many as 26 months have passed since submission was filed. That suggests that there are a lot of discussions and deliberations one after another in the process of correspondence under the review. At last, on April 15, 2025, Leqembi was granted approval in Europe. Leqembi is the first therapy in Europe that targets an underlying cause of AD. As you see after the second bullet point, in Europe, APOE for homozygotes, which accounts for about 15% of patients with early AD, these people are not included in the patients eligible for receiving the drug in Europe. Having said that, in the U.S., Japan, China, and Europe, so-called four major agencies have approved Leqembi around the world.
This European regulatory approval may serve as a reference for regulatory authorities in other countries where Leqembi submissions are filed and being reviewed. As you see at the bottom, the first launching countries in Europe are going to be Germany and Australia. We are aiming at getting the drug to be launched in the second half of fiscal year 2025. We are making preparations now. Now, global Leqembi revenue for FY 2024 was JPY 44.3 billion. As you see, this exceeded the full year forecast. In the Americas, revenue was JPY 26.1 billion. In Japan, revenue was JPY 12.7 billion, JPY 4.7 billion in China, JPY 0.7 billion in others, meaning Israel and South Korea as well. We have started to record revenues. In total, JPY 44.3 billion was recorded as global revenue for us. It has been the first full year in 2024, fiscal year 2024.
Therefore, JPY 44.3 billion as the revenue for the first full year shows that we have been able to make a steady start in building up revenue. Now, turning to the growth trajectory for Leqembi, how should we depict the trajectory, which is explained on this slide? We are able to divide the timing into three major periods, namely pathway establishment phase, demand stimulation phase, and demand expansion phase. We would like to ask you to understand as such, and we would like to organize ourselves in thinking in this way. First, in the pathway establishment phase, we needed to start from scratch in terms of establishing a diagnosis and treatment pathway for Alzheimer's disease.
What I often mention is that this can be emulated to the work, which is as if we are removing a big rock and building a bridge over a large river in a digger tunnel, penetrating a large mountain, one of the most difficult and most burdensome pathways in the modern world, which requires pioneer-like efforts. We believe that we are the pioneer in the dementia treatment, and we believe that we have dedicated ourselves to establishing the pathway. What needs to be done more specifically? As you see, after the second bullet point, you needed to create a flow of diagnosis and treatment of AD, cognitive function testing, APOE testing, amyloid beta testing, PET or CSF were needed. Therefore, it will be very expensive and invasive. Administration, which requires infusion. Therefore, infusion needed to be attended by nurses. For the sake of infusion, patients had to visit infusion centers.
There was quite a cumbersome step. Area monitoring utilizing MRI will be conducted. First, this flow consisting of all these steps needs to be created, and each step has to be established. For realizing this, you needed to get the reimbursement. All these medical procedures have to be covered by reimbursement under each system of health insurance in each country in order to minimize the burden on the patients. Doing all these is required in the pathway establishment phase. Needless to say, what is supporting each step is done by HCPs. You needed to consider deploying and education for HCPs, which cannot be done by Eisai alone. Through collaboration with HCPs at medical institutions, we are conducting these efforts. At the same time, we needed to promote market introduction of Leqembi.
There are so-called formulary at each medical institution, and there are committees to decide adoption of the drugs. Explanation of the safety and the efficacy needed to be provided in order to convince the community to adopt the drug. That is the pathway establishment phase. After this, a pathway has been established. Now turning to demand stimulation phase. You needed to establish capacity to accommodate a certain number of patients for each step in the pathway. The indicated patients or patients with early AD, you needed to support introduction of such patients to pathway. During this phase, efficacy and safety profile of Leqembi had to be established. That means that the administration of Leqembi can be promoted under a safe environment. Such environment has to be in place. As I mentioned, a humanized message is being conveyed during this phase.
Accumulation and the academic presentation of Leqembi real-world data by specialists are being done. On the right-hand side, you see demand expansion phase. What is needed here is to have a coordination network with PCP, primary care physicians, nearby physicians, and specialists or neurologists. There needs to be established a network between the two. That is the condition for this phase. That means the PCPs will play certain roles in diagnosis, testing, and treatment. Not everything is left to specialists. Whenever diagnosis by specialists is necessary, referral should be made. The time for referral can be significantly reduced. That is one of the important conditions for demand expansion phase. The coordination between initiation introduction facilities and follow-up facilities, which is applicable to Japan.
During the first six months, initial introduction facilities are in charge of treatment for patients, and another different medical institution is engaged in the follow-up treatment after that. That is prescribed in the rules in Japan. We believe that we have been able to establish such a system in Japan already. Second bullet point is DTC, direct-to-consumer advertisement for disease awareness. In most cases, these awareness campaigns are conducted under the branded method. As you see below, in order to streamline the pathway, there are various innovations. For example, BBM will be utilized for confirmatory testing and change from infusion to SCAI and utilizing voice and others for conducting digital cognitive function testing. MRI will be utilized for assisting, AI will be utilized for assisting MRI reading. These are becoming visible, and during this phase, these innovations shall be implemented.
These are thought to be the conditions for this expansion phase, demand expansion phase. In FY 2025, five regions where we are rolling out this therapy. Below, you can see which position each region is now. Europe and Asia, where recently the Leqembi was approved, and these regions are in the pathway establishment phase. In private market, Leqembi therapy is being provided. In China, which is positioned in the demand stimulation phase, in the U.S., which is in between the demand stimulation phase or towards the end of a demand stimulation phase because it is in between stimulation phase and expansion phase. For Japan, which we believe has already entered demand expansion phase. Now, turning to next fiscal year, the U.S. is expected to enter demand expansion phase.
For fiscal year 2026, revenue and the penetration of Leqembi is expected to be boosted because of this. Now, Leqembi in the U.S., what are we going to do for this fiscal year? The top is to convey the core evidence of Leqembi in Alzheimer's disease, which is a progressive and a fatal disease, which will continue to progress. Unfortunately, in the end, the patient will die because of this disease. Therefore, early initiation of a treatment and the continuation of a treatment is necessary, and the discontinuation of treatment is not desirable. Such core evidence needs to be conveyed, and also messages related to the improvement in the activities of daily living will be conveyed. This is going to be the basic task that we will continue to do. In the middle of the year, national educational event is considered.
The summary or coverage of the data will be conducted on a national level. The second bullet is related to the IV maintenance dosing, changing to every four weeks, approval of which has been already obtained. What is the significance of this? If you look at the right-hand side, FDA has recognized that for AD, long-term treatment is necessary and treatment should be continued. This approval indicates that FDA has recognized such necessity of long-term treatment and the benefits of a long-term administration was confirmed. Of course, after 18 months, streamlining administration will be achieved. That is one of the advantages. This shows the necessity to continue long-term treatment that has been, in a sense, authorized by these regulatory authorities. Actually, at the medical institutions, initiation treatment is being provided, have shown the effect of increasing number of patients initiating treatment.
Next one is potential IVD approval for BBM. For confirmatory testing, it used to be done through PET, which was very expensive, CSF, which was very invasive. This could be replaced with simple blood-based testing. This is thought to be around the corner. For how to use this method, Alzheimer's Association of the United States is planning to publish the clinical guideline, and the draft version has been already circulated. We believe that this guideline will be published soon. BBM may be utilized for confirmatory testing, which may be implemented by them this fiscal year, which will lead to streamlining and generalizing amyloid beta testing. Now, turning to SCAI, currently being utilized with 360 mg dosing for maintenance treatment. Actually, the submission has been filed and not utilized yet, but the submission has been filed.
Inspections are completed or in the process of being inspected by the regulatory authorities. The PDUFA date is scheduled for August 31 of this year, towards which we believe that we are making steady progress. After obtaining this, we will potentially submit for the approval of SCAI with 500 milligram dosing for initiation treatment. We are making consultation with regulatory authorities at the end of this fiscal year or in early next fiscal year. This SCAI may be utilized for covering the entire treatment period. So far, up to 36 months long-term data is provided, but 48 months data is being prepared. Going forward, there will be conferences such as AAIC and CTAT. Such longer-term benefits or advantages will be shown on such occasions. Next, targeted DTC and PCPs will be explained in the following slides. This shows the new formulation and administration method.
IV maintenance dosing currently under discussion with authorities in Japan and China. For SCAI initiation in Japan and China, preparations are being made for submission. The formulation, as you see in the picture on the right-hand side, the cutting-edge technology provided by Teruyuki Masaka, least painful, this very safe pen-type auto injector will be used, which we believe will become the key factor for changing the treatment. Targeted DTC, why do we call it targeted? In this case, what we mean by targeted is for those patients who have been diagnosed with early AD. Actually, after getting diagnosis, until starting the treatment, it still takes several months.
In the meantime, what kind of a drug Leqembi is needs to be understood by the patients who are diagnosed with early AD through addressable TV with a secure target so that we will be able to contribute to shortening the time until the initiation of the treatment. Or as a pulling factor, we may ask the patients through this campaign to be interested in getting the treatment with Leqembi. We have seen a certain effect so far, and we would like to continue on this next fiscal year onward. Now, turning to BBM, please look at the right-hand side. Currently, the number of triage tests, which are utilized for pre-screening after the full approval was granted in the United States, as you can see here, the number of triage tests is dramatically increasing in the testing of pTau217, not seeing the accumulated amyloid beta.
Such patients are to be excluded by conducting this test. As you see on the left-hand side, for confirmatory testing, if I may repeat, not utilizing the very expensive PET or invasive CSF for confirmation of the amyloid beta, not doing these tests, but more simple and easy blood-based tests can be conducted, which is soon to be seen and implemented. As for approach towards PCPs earlier, please recall the timing, one of the conditions of expansion phase. Currently, about 80% of the patients, 80% of MCI patients are currently under the care of PCPs, but they are not diagnosed with MCI. Therefore, we have to make sure that they are diagnosed so that care can be sought by these patients.
This fiscal year, neurology account specialist, the main component of our sales force, around 2,000 exist in the U.S., and rather around 2,000 high-potential PCPs in the U.S. have been identified, and NAS will be targeting these PCPs. Exactly what are they going to do? PCPs and neighboring specialist institutions, oftentimes these are called IDNs and very large in scale, and help building coordination between PCPs and specialist institutions. PCPs can contribute to identify patients with MCI and mild AD using cognitive testing to diagnose them or use confirmatory BBM testing to identify such patients. If these patients are referred to specialists, the referral scheme should be built. Referral will be quick. Depending on the situation, PCPs themselves may give treatment with SCAI through these AD diagnoses and treatments should become generally available, and that is the major focus in this approach.
Turning to Japan, demand expansion phase is the phase in Japan. Actually, when we look at monthly sales for April, it is already above JPY 2 billion. Demand is strongly expanding in Japan. I would like to further analyze that. What is included in this red band? As the basis, there is history of AD research. In Japan, Aricept was launched in 1999. It is about a quarter century ago. Since then, even during the COVID pandemic, there is a Japan Alzheimer's Disease Academy, and this was held without missing any session, even during the COVID pandemic. AD researchers, doctors, technicians, nurses, and recently even patients are participating, and multifaceted continuous discussions are underway. I believe this is a very strong foundation.
On top of that, as shown on the left, at the time of the initiation, I was afraid that this is going to have a suppressive effect, okay, surveillance and clinical institutions' requirements under optimal clinical use guidelines. On the contrary, these have to be satisfied. So long as these are satisfied, it can be a pathway. Such model was clearly indicated. As a result, nationwide, I believe there was good progress in pathway establishment. Currently, the number of patients who have been treated for more than six months is increasing. Initial introduction facilities and follow-up facilities are cooperating, and there is a good cycle between these two types of facilities based on trust relationship. Referral is made, diagnosis is given, and care is provided, and then patients eventually come back to follow-up facilities.
Follow-up facilities are encouraged to refer patients to initial introduction facilities, and we see this virtuous cycle. Large number of patients are receiving treatment, and safety information is provided as a result, including humanized message. The value of receiving care is communicated amongst five regions. Japan was the first to enter into demand expansion phase. This is the forecast for fiscal 2025. Forecasted revenue, JPY 76.5 billion, $40 billion in the U.S., about 50% increase, JPY 24 billion in Japan, 1.9 times, JPY 9.5 billion in China, and EU, mainly in EU, and some of the Asia included, JPY 3 billion. Total of JPY 76.5 billion is the revenue forecast for Leqembi globally. The basis of this was, as I mentioned earlier, pathway establishment phase, demand stimulation phase, demand expansion phase. Based on that analysis, this forecast is made. This is the last slide on Leqembi.
Leqembi has the potential to expand A beta treatment for patients around the world. First, all-star looking at drugs in the second full fiscal year, $500 million or in excess of $500 million will be a blockbuster drug, and Leqembi will satisfy that criteria this fiscal year in terms of global approvals. Currently, including major agencies, 44 countries have given approvals. On the left side, efficacy and safety, these are established. Data is enriched. As for administration method, maintenance administration with half dosing and SCAI, we have seen progress as shown at the very bottom. Pre-clinical AD, this is a high potential indication where treatment stage will be brought earlier by one stage, and we are steadily accumulating findings and knowledge to prepare submission.
In agreement with the authorities, preparations are underway, and I believe that Leqembi has the potential to further expand A beta treatments. Now, briefly, I would like to share with you the following themes in neurology. In particular, I would like to give an update on E2814 antibody. Left side shows a study on DIAD. These familial hereditary Alzheimer's disease population targeting study, which is a phase one study. Looking at tau pathology, and it has become clear that we should be looking at these two tau pathologies, early tau pathology, by using pTau217 and to use MTBR Tau243 for late tau pathology. It was confirmed that both reduced. Sporadic early AD shown on the right. Targeting phase two study is also starting in combination with Leqembi. Eighteen months of administration is how the study is designed. The features are shown in the middle of the box.
Eisai has data from Clarity AD and other clinical studies. Based on this data, we have a biomarker algorithm. Based on that biomarker algorithm, accurately, we are able to screen patients to be entered into the study. MTBR Tau243 and Tau PET are used to confirm therapeutic hypothesis in sporadic AD. That is the objective, and we also plan to achieve LPI before the end of this fiscal year. Another topic is what we've shared with you on other occasions. Dayvigo is antagonist, and on the other side, on the flip side, there is an agonist, daily excessive sleepiness, falling asleep or falling unconscious, which is narcolepsy type 1. The development for that is steadily underway, as shown in the middle of the page. This compound was found from the library of 250,000 compounds. We identified this as one true agonist.
There was a further synthetic development to improve activity by 10,000-fold. This is similar to the drug discovery history of Aricept. We were able to find this compound, which is quite lucky and inclusive of my memory of Aricept. I have much hopes for this. Once daily administration may be possible, given in the morning, it can fight sleepiness during the day, but during the night, it will allow sleep. We plan to obtain top-line results from POM study in first half fiscal 2025. Now, revenue driver, Lenvima. Lenvima is celebrating the 10th anniversary and has been administered to more than 500,000 patients since launch. This fiscal year, global revenue is in excess of JPY 328 billion, achieving double-digit growth, and major driver is Americas. Year-on-year growth was 28%. What is noteworthy is that amongst these four cancer types, all cancer types growth was achieved.
All these cancer types are seeing new competitions entering into the market. Ten years ago, the first cancer type was thyroid cancer. Then HCC followed. In these two cancer types, the indication is monotherapy, not in combination, but in monotherapy. Despite very fierce competition in the monotherapy setting, growth is achieved steadily. This shows the power of this drug, I believe. As for RCC, in combination with Merck's Belzutifan in triplet and doublet combination, studies are underway to obtain indication, and HCC in combination with TACE is shown at the bottom of the page. This shows a full-scale timeline, but there will be interim analysis depending on the results. It may be possible to shorten the timeline. Now, turning to structural reform, earlier on the occasion of the information meeting, medium-term target for fiscal 2027 was presented.
JPY 30 billion SG&A improvement target was also included, and the details of that are shown already in Americas. Basically, Leqembi and Lenvima, two-brand structure exists. Regarding Lenvima, many large-scale, many reps are not required anymore in large scale. Depending on the stage of each drug, we have streamlined. Regarding Leqembi, to a certain degree, market introduction phase has been completed. Staff that were necessary to achieve access, we are now in the phase to downsize. In addition, neurology and oncology may have duplicate functions which can be eliminated, and we have also streamlined in the administrative department. Americas structural reform is almost complete. Towards fiscal 2025, it will be effective. That is the expectation. We will be focusing on structural reform in Europe. We have already begun our efforts this fiscal year.
Towards the end of this fiscal year, we expect to complete the structural reform in Europe. These two regions will be therefore undergoing or have undergone structural reform. As a result, we expect to achieve the financial benefit as shown at the bottom of this page. In China and in EAGS, we are also conducting organizational transformation. In the commercial area, there is structural reform, but not limited to that. In R&D, we are also pursuing streamlining. DHBL, as shown at the left top, deep human biology learning. Based on human biology, research and development is carried out. That is why the R&D organization is named as such. Please understand that we are now in the second phase. The core of that is the technology to profile molecules using cutting-edge technologies and translational research organization. Mr. Horie gave a presentation on a previous occasion.
He is also in attendance today. Discovery and clinical will be bridged with translational research so that development can be quickened. R&D streamlining is pursued mainly through these efforts. DHBL top leadership now includes younger leaders. The bottom is stable supply of major products and reduction of cost. We have to also consider the geopolitical situation of late. This importance is growing as a result. Leqembi's supply chain was improved. In the U.S. as well, supply chain was enhanced. Regarding Dayvigo, since it is in an expansion phase, and it is not directly impacted by geopolitical factors, but drug substance and drug products will be produced utilizing overseas plants to improve supply chain and to achieve reduction in cost of sales. Now, I am coming to almost the end of my presentation. This shows resources invested into A beta antibody drugs over the past five years.
Since fiscal 2021 to this fiscal year, in five years, cumulatively around JPY 370 billion was invested in R&D and SG&A. In fiscal 2021, this was the final year of Atacana MOB, and resource investment was double the usual level, as shown at the bottom. As I described earlier, Alzheimer's disease is the most difficult disease in contemporary society, and Eisai has introduced drugs that target the underlying causes to achieve global contribution. That is our raison d'être and our mission. In order to fulfill our mission, we have invested resources. That is what we have been doing. Naturally, this will impact operating P&L. The trajectory of operating profit is shown in line at the bottom. Fiscal 2026 projection is that we will have a balanced or break-even operating income situation. That is the expectation. Finally, two more pages.
This is the PL for this fiscal year. First, please look at cost of sales. 1.7 percentage points increase of cost of sales. What is included there is IRA related to Lenvima, Inflation Reduction Act related expenses for Lenvima, and drug price revision in Japan, especially Dayvigo and Haravan were subject to drug price revision. One-time revenue, which is above that, one-time revenue declined, and there was also impact from product mix. Because of these four factors, cost of sales increased. However, please look at R&D expenses. It decreased by 0.6 percentage points, and this is mainly because Leqembi R&D expense has passed the peak stage. SG&A also declined. It is forecasted to decline by 1.6 percentage points. U.S. structural reform effect is the main factor. In SG&A in Europe, due to various reforms, there will be expenditures.
These are included in the forecast of SG&A expenses, and still, the forecast is that it will decline. The profit for the year also is forecasted to decline, but in the previous fiscal year, there was a reduction in capital in the U.S. As a result, there was a tax effect in the previous year, but it will be back to normal tax rates in fiscal 2025. That is the reason. This is the final slide. Conclusion. In fiscal 2024, we proactively allocated resources to Leqembi business. As I briefly mentioned, we have a subsequent pipeline in the neurology area, and we achieved revenue and profit growth driven by the expansion of major global products. After 26 months since the submission in Europe and after much interaction, Leqembi approval was obtained in Europe.
Now we have, in all major regions, launched Leqembi, and Japan has entered into demand expansion phase. Next fiscal year, we expect the U.S. to enter into the demand expansion phase. In fiscal 2026, we expect Leqembi business to turn profitable. In fiscal 2025, we will maintain investment of resources to maximize Leqembi, but we will also carry out organizational transformations in regions, auxiliary innovation creation, and strengthen the global supply chain. Thank you.
Now, we would like to open the floor for Q&A session. We would like to receive questions from analysts, and then we'd like to open the floor for media. If you wish to ask a question, please mention your name and affiliation before asking a question. In order to take questions from as many people as possible, we'd like to ask you to limit the number of questions to one at each time.
If you have any question, please raise your hand. First, analysts. The person in the third row, please have the floor.
My name is Hashiguchi. I am from Daiwa Securities. Regarding the Leqembi revenue in the U.S., according to the information meeting held, it was the end of March. Mr. Ike said that you wanted to aim at more than double, and Mr. Haruna as well said that you were confident in achieving more than double. So, 153% on a yen denominator term concerning the forex, and it is only increasing by 1.6 times during the past one and a half months. What happened changing your forecast from doubling the revenue or made a downward revision? Could you please give us the background or reason for this?
Utilizing the slide, we suggested the slide. Could you please show the slide?
Here, the U.S. is now approaching the end of demand stimulation phase. That is how we see the current U.S. situation now. That is the biggest reason. Boosting or doubling the revenue is not something which has become reachable yet, but for fiscal year 2026, as I explained in detail today, the U.S. is expected to enter a demand expansion phase as well. By following this growth trajectory, we are confident. Actually, in April, revenue in the United States and the number of vials shipped out have shown steady growth and expansion. Therefore, we believe that the U.S. market is immediately before entering into the demand expansion phase. That is the reason for the numbers that have been downwardly revised from the previous ones.
What happened recently? You may now think that there needs to be further efforts that should be done in order to expand the demand.
Are there any such efforts to be taken? If so, please share them with us.
Thank you for your question. As we have shown here, below the demand expansion phase, as you see, BBM, SCAI, or utilization of digital technology, these are starting to be implemented. Implementing all these will be necessary for expanding the demand. Many patients are seeing PCPs, and the PCPs need to be activated by means of participating in the treatment and the diagnosis. Otherwise, the U.S. cannot enter securely this demand expansion phase. That was our analysis. Thank you very much.
Next, attendee in the first row, please.
Wakao from JPMorgan. Regarding the U.S. Leqembi, I also have a question. According to what you have just mentioned, I understand why you have the forecast for this fiscal year, but I would like to understand the competitive situation.
Is Leqembi a threat, or is it going to become a threat? Biogen's briefing session sounded as though it is not impacting much. That is my impression. Looking at the sales of Leqembi in comparison to your quarter sales, Leqembi's sales are stronger, so I'm concerned that it may become a threat to Eisai. I believe the benefit for Eisai is the long-term administration possibility, but looking at the current market environment, will the shares be taken by Leqembi because of convenience?
I would like to answer in general terms, and then I would like to have people who are responsible for commercial business in the U.S. and Japan respond to your question earlier about Europe. I talked about Europe, and as for the review in Europe of Leqembi, this is on the official website of EMA, and I believe that everything is told there.
It's vague recollection, so please bear with me. But APOE for non-carrier population, even in APOE for non-carrier population, it was not found to be clinically meaningful. Data showing long-term usefulness was also lacking. I believe the comments to that effect are found. This is public domain information, so please refer to that yourselves. The basic for us is that Alzheimer's disease is a progressive disease and a fatal disease. It is a progressive disease, and the cause of the progressiveness or pathology that causes progressiveness is protofibril. Leqembi targets protofibril that accelerates neurodegeneration. It is the only antibody that has affinity to protofibril. And low-titer population, early treatment has shown a remarkable efficacy in clinical trials and has shown in maintenance dosing. There is also usefulness in long-term administration. We have data that shows sustained effect. I believe that is the basic regarding the usefulness of Leqembi.
If we may, regarding the U.S., Mr. Haruna, and regarding Japan, Mr. Yusa will discuss the commercial aspect.
Thank you for your question. I'm Haruna, responsible for Leqembi in the U.S., and let me answer the situation regarding the United States. The impact from a competitive product we feel is limited even now. As Mr. Naito, CEO, explained, Leqembi growth is continuing, and in April, monthly revenue was a record high, and in May, growth is continued, as we have seen in the early part of May. What we are most paying attention to is prescribers. More than 70% of prescribers are prescribing only Leqembi in the United States. This shows how much more Leqembi is chosen in the United States even today.
Convenience was also included in the question, but according to what we hear about consenting process in a clinical setting, it may be convenient that it's a one-time administration, but a low incidence of ARIA, if that is understood well, Leqembi by far is chosen. There is also experience of the physicians, which also the patients are interested in. Leqembi has a long-term experience. There is long-term experience of Leqembi, and I think this is a compelling reason for Leqembi to be chosen. Mr. Naito, CEO, mentioned AD is fatal. It's a long-term chronic disease, and therefore, long-term treatment and early treatment through Leqembi, I'm sure, will be selected as a gold standard drug. Therefore, I believe that Leqembi will continue to travel on the growth trajectory.
Thank you for your question. I am Yusa, responsible for Japan business. Let me share with you the situation in Japan.
As mentioned regarding the U.S. by my colleague, the impact from competition in Japan is also very limited. This is a progressive disease, and it's a fatal disease. As such for AD treatment, when consenting patients, when amyloid beta has turned negative after one year and the administration will be stopped, if such explanation is given by physicians, oftentimes patients and families become concerned, and continuous treatment is possible with Leqembi. In the end, oftentimes Leqembi is selected as a result. For more than one year, Leqembi has been administered, and the experience of using Leqembi for more than one year is having an impact when Leqembi is chosen by doctors, patients, and families. Doctors are more familiar with the use of the drug, and patients may ask that question. After that question, oftentimes, more often, Leqembi is chosen, as we are told.
There is also clinical optimum treatment guideline in Japan. MMSE score is different. For 29 and 30 in MMSE score, only Leqembi is possible to be used. MCI and earlier, more mild patients may come to seek treatment, and only Leqembi can be given for MMSE score of 29-30 patients. Regarding the frequency of visit, biweekly visits actually are felt as beneficial by patients and families. There is also actual evidence that going out is beneficial for dementia patients. Patients who have difficulty visiting clinics every two weeks, from the beginning, Leqembi will not be selected. We believe the impact on Leqembi sales is minuscule. As Mr. Naito, CEO, mentioned, April this year, we had a JPY 2 billion revenue, or on a daily basis, close to JPY 100 million sales. That is the pace we started out this fiscal year.
We are very confident of achieving the number of JPY 2 billion for Japan.
That is clear. Thank you. Long-term administration, which is a strength, is clearly understood by physicians and patients. I can see that. Is it correct to understand that you are steadily decreasing cost of sales? Yes. If details are necessary, please catch a person responsible later, or should that be responded to now?
Yes, we are making steady progress in reducing cost of sales. Please rest assured.
My name is Sakai from UBS Securities. Regarding the graph on page 23, honestly speaking, JPY 370 billion has been invested. I am surprised, and I think there have been no other companies in Japan which are committed to make such a big investment.
During the time, you have continued to run one standalone product in loss-making status, and that has dragged down the business as a whole of the ASI, and it has been affecting the evaluation of the investors and stakeholders, and that has affected the stock price. This is actually the image diagram, but for example, in 5 to 10 years from today, do you think that they will be able to obtain the return exceeding the amount that has been invested? Could you please give us a take as CEO?
In the meantime, we have fully dedicated ourselves to be held accountable for what we have been doing. Perhaps all of which have not been understood by the market, or there may have been some over-expectation, and too high expectations may have been invited.
Last year, we had to make a significant downward revision to the forecast, which was quite embarrassing for me. We have not been able to gain satisfactory confidence from the market. We are very sorry for that. Regarding the accountability or explaining to the market at every potential occasion, we have made all our efforts in trying to explain. What we have drawn here at the bottom, these efforts required us to put a lot of resources under a partnership model through collaboration with Biogen. We have been able to achieve these globally. Both of us, and the dotted line for extension to achieve the balanced profit and the loss, and reaching the break-even point in fiscal year 2026, we are committed to achieve that.
Actually, in R&D expenses, already in fiscal year 2025, R&D expenses invested in Leqembi have already started to reduce, and SG&A will probably peak out in fiscal year 2025. The expenses, I'm sure, will be reduced going forward. We will be able to commit ourselves to achieving the break-even point or turning this business into profitable business in fiscal year 2026.
Thank you very much for your answer. You are making reforms in Europe. After getting approval, and immediately after getting approval, you started the reform. I was not comfortable in hearing that. It is only symbolic. With the minimum, you would like to achieve the contribution to profit. You needed to negotiate for the reimbursement. I do not think that the very high price will be granted in Europe like you did in the United States.
Having considered all this, have you made that decision to do the structural reform?
Thank you for your question. In order to get reimbursement approval in each country in Europe, at longest, it may take three years. As I said earlier, in Germany and Austria, for the first six months, the free pricing will be applied in launching. We believe that in these two markets, we will be able to launch first in Europe. After that, we needed to start negotiation of pricing and reimbursement. There are uncertainties in that. Also, there are somewhat geopolitical. Around the end of last week, there was an announcement in the United States. Looking at all these movements, we needed to manage well the developments in Europe. For Lenvima in Europe as well, we believe that the phase that required us to invest a lot of our marketing power has ended.
In that sense, we would like to pursue optimization.
Understood. Thank you very much.
Thank you. Next attendee seated second from the edge on the fourth row.
I'm Ueda from Goldman Sachs. Company-wide expenses and your plan for that is my question. Going forward, research and development cost, you have shown a slide earlier, which suggested peaking out of Alzheimer's disease spending. Is it going to peak out this fiscal year? You also mentioned that SG&A may be peaking out. By optimizing sales organization without increasing expenses, do you expect to increase revenue and profit? It seems that optimization is underway for both aspects this fiscal year. What is the outlook going forward?
In fiscal 2026, ROE of 8% is the target. Operating profit level for that is more than JPY 80 billion, around JPY 83 billion, or JPY 85 billion.
I believe that is the range of operating profit required. Towards that, we should make steady progress. We are on that trajectory.
Understood. Thank you.
Next, we'd like to receive questions from participants online. Mr. Yamaguchi of Citigroup, could you please unmute yourself?
This is Yamaguchi from Citigroup speaking. Can you hear me?
Yes, we can.
You did not mention assumptions for the financial results. It will be difficult to set assumptions, but what is your evaluation of the impact of forex rates?
Mr. Iike is going to respond.
Thank you very much for your question, Mr. Yamaguchi. The tariff policy of the United States is making headlines in news widely. As you know, the pharmaceutical industry has not been subject to tariff. Response to that is not yet still certain. The guidance for fiscal year 2025 has not incorporated the potential impact by tariff yet.
In the United States, mainly Leqembi and Lenvima, we are trying to control inventory and also improve the supply chain. We have been taking measures, whatever measures we are able to take now. Also in China, and the U.S. tariff retaliation is being discussed. In China as well, management of the inventory as well as improvement of supply chain are being done. Therefore, we do not think that there will be any impact by tariff on China.
Thank you.
Thank you very much.
Next from Morgan Stanley, Muraoka-san, please. Mr. Muraoka from Morgan Stanley, please unmute and please give us your question.
Thank you for taking my question. I'm Muraoka from Morgan Stanley. About cost of sales in the budget for this fiscal year, you've mentioned several reasons that sales cost ratio will increase, but I am not still fully convinced.
Lenvima, Dayvigo, one-time income, these are almost zero sales cost items that may see fluctuation in revenue, but JPY 15 billion increase in cost of sales appears only to be linked to Leqembi. My question is, SCAI launch is scheduled, and so the dose is different, volume device is different. I felt, looking at these numbers, that this is affecting the cost of sales number. Is this wide off the mark, or is this close to the actual status?
I usually do not provide a right-on-the-mark answer, but the main reason is IRA, Inflation Reduction Act, and Lenvima will be impacted by the increase in expense. That is the reason of increase in cost of sales, the biggest reason. The next is drug price revision and reduction of one-time income and change in product mix. These factors are equally impacting. I hope this answer satisfies your question.
I'm sorry, I'm persistent in asking, but Leqembi IRA, due to IRA increase in cost, is it? I thought this was net sales, so it will be neutral, or revenue may decline, but for cost, I think it's neutral. Am I mistaken?
Mr. Yasuno, can you answer, or Mr. Kosaka? Mr. Kosaka will address the question. Can you answer, Mr. Kosaka?
I'm responsible for supply chain strategy. This is Kosaka speaking. As for Leqembi, IRA impact exists in the United States. On the other hand, gross to net price, when we look at that, in the end, sales cost ratio increases, and that is the reason.
I see. Thank you. I have a related question.
This morning in Nikkei, there was a report about the U.S. that API production of Leqembi may be partially transferred to the United States, but I think the cost of that will be borne by Biogen and not by Eisai. That's my understanding. Is that correct?
Mr. Kosaka, once again, will respond.
Thank you for your question. Once again, this is Kosaka speaking. Your question is about expense or investment? Investment and increase in manufacturing cost, that can be held, but who is going to bear that cost? That is the question.
Thank you for the clarification. Drug substance site launch does not require investment. Existing line will be used, and there's no increase in cost of sales with this launch of the new line.
I see. Thank you.
From Macquarie, Tony Ren. Tony Ren from Macquarie Securities, please unmute yourself.
Hi, can you hear me?
Yes, we can hear you.
Okay, yeah, perfect. Yeah, I also want to follow up on Leqembi. I noticed the working capital, the inventory on Leqembi has increased a little bit. I just wanted to see if it's because of deliberate inventory planning, for example, inventory building ahead of the possible tariffs, or is it because of weaker sales than you have anticipated? Yeah, thank you.
Regarding your question about the inventory, Mr. Shomon is going to respond. Mr. Shomon or Mr. Kosaka? Excuse me, Mr. Kosaka is going to respond.
Thank you very much for your question. My name is Kosaka. I'm going to answer your question. Regarding the inventory in biologics, from production start until the completion, it takes longer time for production. In order to prepare for the expected expansion of demand, the production is ongoing steadily.
For the medium to longer term, the cost, in line with the expansion of revenue, the secure management of inventory is expected. Therefore, there is no concern. Thank you for your question.
Next, SMBC Securities, Wada-san, please unmute and please start.
Thank you. I'm Wada from SMBC Nikko Securities. Can you hear me?
Yes, we can.
Thank you. I have a question from a very different perspective. GLP-1 in obesity treatment may be used in a phase 3 clinical trial for Alzheimer's disease. Is it plus or minus or neutral? Novo Nordisk Wegovy, Alzheimer's phase 3 study, I think is expected to be completed in September. Is this going to have a positive, negative, or neutral impact on the revenue and profit of Leqembi? Could you also discuss positioning?
Mr. Itoo, can you answer?
This is Itoo, responsible for DHBL.
As you pointed out, GLP-1,
Can you speak closer, speaking to the microphone?
This is Itoo speaking. I'm responsible for DHBL. As you pointed out, GLP-1, AD study is underway, but currently, clear elucidation of biology is not obtained. The protofibril, this is the toxic species that is captured by our product. Such understanding does not exist for GLP-1. Currently, we don't consider it to be a threat. Mr. Horie, would you like to add?
Yes, I'm responsible for translational. My name is Horie. First, looking at the mechanism of action, it is completely different. Leqembi targets clearly a toxic protofibril, and there is a wealth of evidence. Human biology has been confirmed, and therefore, we consider that there will be absolutely no impact.
Thank you.
The way it is used, Ugovi, phase 3, standard of care such as Leqembi will be continued, and Ugovi is added on top. Basically, do you think that Ugovi will be used in combination?
This is not yet approved, so it is difficult to comment on that.
I see. Thank you.
From Sanford Bernstein, Sogi-san. Sogi-san, from Sanford Bernstein, please unmute yourself.
Thank you very much. Regarding Leqembi, I have two questions. My first question, earlier in January, maintenance dosing was approved, and infusion capacity was to be expanded, as you have continued to mention. Up until the end of April, have there been any impact of such efforts onto the revenue?
Mr. Haruna is going to respond.
Thank you very much for your question. I am in charge of U.S. business. My name is Haruna. Let me respond.
At the end of January, IV maintenance treatment was approved. IV maintenance treatment is introduced by an increasing number of medical institutions, and ACCPs and patients have now come to understand better the benefits of long-term administration of treatment with Leqembi. At the medical institutions where the maintenance therapy is being conducted, it has seen the increasing number of patients who initiate treatment. As you pointed out, the infusion chairs, I believe that that issue or challenge has been resolved. The record high sales and shipment for the month of April was achieved, as we mentioned earlier.
Thank you very much. Maybe this is a follow-up question for Mr. Haruna. In the demand expansion phase, when involvement by PCPs is expected, or with SCAI, PCPs will be able to prescribe, which may lead to the future further growth.
According to market research or your discussion with PCPs in the field, do you think that PCPs are going to start the prescription of the SCAI, or what kind of hurdles or challenges do they feel in doing that?
Haruna is going to respond.
In a demand expansion phase, PCPs' involvement is considered to be very important. If I may share with you some examples, in the east of the U.S., the largest IDN, currently about 600 patients are being prescribed Leqembi. What is the reason for that? PCPs and neurologists are collaborating very closely. Therefore, as a result, there has been an increasing number of referrals, and the time to referral is being shortened. Therefore, that has led to the expansion of the prescription. Participation or involvement of PCPs is very important in the demand expansion phase.
We believe that this is going to be the key factor. As you said in your question, PCPs, if they are going to start the prescription of Leqembi, among PCPs, what is important for them is that they are not able to diagnose, particularly that testing on the amyloid beta is not something easily done by themselves. BBM for confirmatory testing being potentially approved and reimbursed by the end of this fiscal year, and together with SCAI, which will allow PCPs to start prescribing on themselves. Leqembi of Eisai has such a uniqueness, which is considered to make a significant contribution to that. Based upon our market research, PCPs who think that they are willing to start the prescription of Leqembi. We mentioned that there are about 2,000 high-potential PCPs today, but these are the people, physicians who.
So how could you please?
Thank you very much for your answer. Could you please explain how you are identifying high-potential PCPs?
Let me, Haruna, continue to respond. I would like to refrain from disclosing details on the high-potential PCPs, but based on the claim data and the diagnosis and triage for amyloid beta is being done already. There are a certain number of PCPs who are willing to be involved in the diagnosis and treatment, and not only the quantity, but also the number of such PCPs. BBM and cutting-edge treatment, where they are willing to participate in those cutting-edge treatments, we have confirmed such high-potential PCPs based upon the claim data.
We would like to open the floor from the media people. Please raise your hand if you have any questions.
My name is Banno from Nikkei.
The U.S. market is quite uncertain, and how do you plan to respond earlier regarding a tariff? There was already a question and answer about the reduction of drug prices. How do you understand the impact from most favored nations? You have mentioned organizational reform in Europe, but depending on the situation in the U.S., as the management, is it possible to make a decision to focus more on Europe?
First, Mr. Yasuno will respond to that question.
Thank you for your question. I'm Yasuno, responsible for Americas business. As you are aware, on Monday, President Trump signed an executive order delivering most favored nation prescription drug pricing to American patients. President Trump signed that executive order. Within 30 days, it is expected that the government will be communicating to pharmaceutical companies the target price based on MFN, most favored nation.
However, other than that, in what way, for what products will the price be indicated? What countries will be the reference countries which will be in the scope? Medicare, Medicaid, commercial insurance. Once a target price is set, then in actual transaction, what level of price is going to be adjusted?
Specifics are quite uncertain. Furthermore, it also says that there will be rules-making, but how rules will be made is also quite uncertain. Furthermore, if this MFN is to be applied broadly, new legislation may be necessary, and that would require approval by the Congress. Given that situation, and currently, the Leqembi list price is at the same level in Europe, Asia, and Japan as in the U.S.
As for Lenvima, in the U.S., under Medicare Part D, D as in dog, there is a sales under the first Trump administration, when there was also an attempt for MFN. Medicare Part D was not included in the scope. Leqembi and Lenvima also are used in a very small part in Medicaid. In any event, through continuous engagement with the Trump administration, we would like to understand better the details of the program, and we will implement necessary measures. Once the situation becomes clear, or if the impact becomes clear, when necessary, we will provide an update. Turning to Europe, I believe uncertainty is becoming greater in Europe as well. After the announcement of the tariffs, the EU is worried that industries in the EU may be hollowed out, and competitiveness may become weaker. European policymakers, I believe, became most concerned about these industrial policies.
Maybe adopting or positive industrial policies may start to be adopted in life industry. I believe there are such potential signs. FPR, the industry association in Europe, is taking such an approach to EU authorities or to member states. In the midst of this, in the executive order, it also mentions the need to increase price in the EU, OECD GDP per capita drug spending. I forgot the details, but the ratio was mentioned, and it calls for an increase in price in Europe. Otherwise, it's a free ride situation. On the U.S. and EU, it is enjoying innovation, taking a free ride. What responses will be taken, including by the EU, is what we are paying very close attention to. On the part of the industry, the EU industry is seeking a change in industrial policy and is approaching the authorities.
Next question.
My name is Susumu Shimoyama, nonfiction writer. Could you please explain this in an easy-to-understand manner? Leqembi approval in the U.S., accelerated approval, was in January 2023. Since then, you have established a pathway and a sales force. In September, approval was granted in Japan. There was a time lead of eight months between the U.S. and Japan. Having said that, why was the penetration of Leqembi treatment in the U.S. slower than that in Japan? Could you please explain in an easy-to-understand manner?
Mr. Shimoyama, thank you for your question. Accelerated approval and the traditional approval are different in terms of the scope of activities which are allowed. Therefore, many medical institutions under the accelerated approval, passage of the drug through the formulary cannot be done. Therefore, investment resources in order to establish a pathway were not also possible under the accelerated approval.
Aduhelm, which was a predecessor to Leqembi, was an example. Therefore, there was a concern that such an example may be reproduced. Pathway establishment was started in a full-fledged manner after the full approval was obtained in July. As you know, in the U.S., the health systems or medical services are very different from state to another. Florida, California, or the Midwest have very different systems. Therefore, a uniform pathway model cannot be applicable. For example, infusion can be done at some in-house chain or ambulatory infusion center, or outside, dedicated infusion sites may be utilized by other medical institutions. When it comes to establishing the pathway, the style of a pathway can be very different from one to another based upon the situation in each area. It might have been a very challenging task.
As has been mentioned earlier, currently, over 500 patients are being treated or diagnosed and treated by one IDN or hospital groups. Actually, there are many other such examples where a pathway has been established. Therefore, we have a very promising prospect. When we can have PCPs getting involved in other diseases, for example, DM, diabetes mellitus, with the introduction of the blood-based testing and diagnosis, PCPs started to be engaged in the treatment very rapidly. Such a situation is about to come for AD.
I have another question about E2086. I think this is what you are repeating, what you experienced in the RSF, selecting the compound from the library of 250,000 compounds and 10,000 times more potency. Compared to the 1980s and 2020s today, what is different? Or do you think that, in principle, it is similar in the days of Mr. Sugimoto?
I could feel that they relied on intuition. I think that rather than intuition alone, do you think that there are other methods that you could apply in 2020?
Mr. Ido, I will talk about that intuition thing later, but thank you very much. My name is Ido, I am in charge of DHBL. Let me respond. As we mentioned, through high-throughput screening, very interesting thing which was not mentioned, our essence of the medicinal chemistry was embodied and materialized into this project. In the process, we combined characteristic unique screening. Combination with AI was also applied a lot, particularly when it comes to the sleep platform. In the development of lemborexant, we established that platform. The brainwave analysis required a lot of manpower.
Therefore, it was not available readily for screenings, but in-house work was done within combining this technology with AI and the chemists as well. This 3D complex structure, the asymmetric points were hopped at dozens or hundreds of positions or sites. Through these complex processes, we were able to find this final compound into which we have a lot of pride, confidence in, I think, which is the same in the days of Mr. Sugimoto and RSF. He was the one who was very lucky. What kind of person would be able to receive such a fortunate moment? I think that, Mr. Shimoyama, you have been written that in your books. I would like to ask you to write another book featuring on that point. Through days and nights, scientists are always making efforts.
But there are some scientists who can encounter happy moments or luck or others who never have such luck. I have been thinking about what kind of scientists would have such fortune over the past 30 years and the collective knowledge held by the group led by Mr. Sugimoto, that kind of collective knowledge consisting of individual knowledge. The level of collective knowledge is high with such a group. I think that such a serendipity, fortunate moment may come in this kind of a hope. Strong leaders may be available, but the entire group may be motivated very highly. I hope that Tsutsumu Shimoyama's next new book may utilize this as a hint for what type of a scientist serendipity may come. Yes, I will keep watching it.
Thank you.
We have gone beyond the scheduled time. We apologize. With that, we would like to conclude today's briefing session.
Thank you very much for taking the time today.