Thank you very much for taking your time to join the financial results presentation by Eisai Co., Ltd. It is now time. We would like to start the financial results presentation session for Q1 FY 2025. Today, it will be held in a virtual format. Please download or look at the slides for the presentation on our website. Let me introduce the presenter today, Mr. Keisuke Naito, Representative Corporate Officer, Executive Vice President, COO, and Chief Growth Officer. Over to you, Mr. Naito.
Thank you very much for joining us today for our earnings call for the first quarter of FY 2025. I am Keisuke Naito , COO and chief growth officer. With many companies reporting their earnings around the same time, we have decided to hold this conference call entirely remotely in order to take into account the burden on the participants. Let's start. This shows today's agenda. We will give you the business update. LEQEMBI and LENVIMA will be updated. Next. During the first quarter of FY 2025, revenue increased 7% year-on-year and profit increased 55%. First, the pharmaceutical business segment expanded due to growth in what we call 3Ls, comprising LENVIMA, LEQEMBI, and lemborexant, or DAYVIGO, to 119% of the previous year. The efficiency improvements resulting from the structural reforms implemented since last year have contributed to this growth.
LEQEMBI is making progress smoothly toward achieving the full-year forecast as pathway establishment progressed. A double-digit growth was achieved in Japan, the U.S., and China compared to the previous quarter. In the U.S., emerging surge towards demand expansion is underway, and preparations for market launch are progressing smoothly for SC AI maintenance therapy. Launch preparations for EU are also progressing smoothly. At AAIC, a high quality and substantial quantity of data were presented, aimed at enhancing the value of LEQEMBI, which I will explain later. The U.S. Alzheimer's Association has also published clinical guidelines for confirmatory tests using BBM, and progress toward amyloid beta confirmatory testing is being steadily made. LENVIMA has grown by 7% based on CR. Progress toward achieving the full-year forecast is proceeding smoothly, and we have made important progress towards maximizing patient value, receiving a favorable decision in the High Purity Patent Infringement Lawsuit .
Here is the performance update. Next. Regarding the consolidated performance for the first quarter, we have secured increased revenue and profits while continuing proactive investment in LEQEMBI through the expansion of the pharmaceutical business. We are making steady progress towards achieving the full-year forecast. Revenue was JPY 202.7 billion, absorbing a negative impact of JPY 10.1 billion from foreign exchange rates, representing a 7% increase from the previous year. Revenue for the pharmaceutical business was JPY 198.4 billion, with a 6% increase year-on-year due to the growth of the 3Ls. Cost of sales was JPY 42.6 billion, with a cost ratio of 21%, the same as the previous year, resulting in a gross profit of JPY 160.1 billion, a 7% increase year-on-year. R&D expenses were JPY 38.8 billion, 93% of the previous year's level, and accounted for 19.1% of revenue.
Due to cost efficiency improvement, this ratio decreased by approximately three points from 22.1% in the previous year. SG&A expenses totaled JPY 100.2 billion, an increase by 1% from a year earlier, including JPY 36 billion in expenses regarding share profit with LENVIMA paid to Merck. As a result, operating profit reached JPY 20.7 billion, up 55% year-on-year, and the net profit reached JPY 15.3 billion, a 33% increase from the previous year. Profit for the period attributable to owners of the parent was JPY 14.5 billion, up 37% year-on-year, with all lines of profits showing increases. Both revenue and profits made a good start for fiscal year 2025. Next. Regarding the analysis of factors affecting revenue transition, the top left shows revenue of JPY 189 billion for the first quarter of fiscal 2024.
In the first quarter of fiscal 2025, as shown in the pink box on the upper right, revenue from 3Ls was JPY 120.7 billion, up 19% year-on-year. This significantly drove the expansion of the pharmaceutical business, resulting in an increase of JPY 11.9 billion in revenue. LEQEMBI was the biggest growth driver, with an increase of JPY 16.9 billion from the previous year. DAYVIGO and LENVIMA also grew by JPY 1.6 billion and JPY 0.4 billion, respectively. As a result, revenue was JPY 202.7 billion for the first quarter of fiscal 2025, up 7% year-on-year, with an increase of JPY 13.6 billion. Next. As for the breakdown of operating profit transition, revenue increased due to the growth of 3Ls, resulting in a JPY 10.8 billion increase in gross profit.
The R&D expense ratio to revenue decreased by 2.9 points due to the revenue growth and the cost efficiency improvements through structural reforms. The SG&A expense ratio decreased by 3.2 points due to the revenue expansion driven by the growth of 3Ls, improvements in functional and organizational efficiency, and the impact of foreign exchange fluctuations. As a result, while continuing to invest proactively in the growth of LEQEMBI, operating profit for the first quarter of fiscal 2025 increased by more than 1.5 times from the previous year to JPY 20.7 billion, representing an increase of JPY 7.3 billion year-on-year. There are no changes to the consolidated financial forecast for fiscal year 2025 from the disclosure in May.
Continuing from fiscal 2024, we are aiming to establish a foundation for a stable earnings structure, targeting ROE of 8% by 2026 by enhancing operational efficiency through structural reforms and strategic optimization of R&D resource allocation. We aim to achieve revenue of JPY 790 billion and operating profit of JPY 54.5 billion. Next, I will explain the global business update for LEQEMBI. Global revenue of LEQEMBI for the first quarter was JPY 23.1 billion. Sales in Japan, the U.S., China, and other regions all saw double-digit growth. In China, the results include one-time impact of stockpiling by distributors in response to the risk of tariffs, but even excluding that, sales grew at a double-digit rate due to expanding demand. The number of markets where submission for approval has been filed is also steadily increasing, showing steady growth as a global drug.
LEQEMBI is advancing smoothly toward achieving FY 2025 sales forecast of JPY 76.5 billion. Next slide, please. In the U.S., there is emerging search for demand expansion. Sales grew 20% on a constant exchange rate basis from the previous quarter. Amyloid beta tests are also increasing. BBM, Blood-Based Biomarker triage tests, have grown by an average of more than 130%, and the amyloid beta positivity rate has increased. The number of PET or CSF tests conducted has also increased by an average of more than 120%. We are delivering humanized messages to healthcare professionals, emphasizing how the LEQEMBI treatment may help patients maintain who they are for longer, encapsulating a message. You still can be with LEQEMBI, featuring the actual patients treated with LEQEMBI and incorporating empathy and the differentiation into LEQEMBI treatment.
The approval of IV maintenance treatment is confirmed to have a positive effect on LEQEMBI initial treatment. Regarding future growth factors, we launched a targeted DTC campaign, TV campaign from June 9th. This campaign has been highly evaluated by healthcare professionals for its effectiveness in encouraging early medical consultations. By targeting patients who have received an early AD diagnosis, the DTC campaign is fostering the understanding of LEQEMBI treatment and encouraging a positive attitude towards treatment. BBM clinical practice guideline was issued by the U.S. Alzheimer's Association International Conference at AAIC 2025. For the first time, the association recommends BBM as a confirmatory diagnostic tool. We anticipate that BBM will be widely adopted as a triage test and confirmatory test in the society. The PDUFA date for SC AI maintenance treatment is set for a very close date, August 31st.
The introduction of easy-to-use SC AI has made home administration possible, significantly lowering the barriers to long-term continuous administration and may enable substantial reductions in medical costs associated with intravenous infusion. Preparations are steadily underway for a swift market launch following approval. Starting in the third quarter, we will begin an approach led by PCP-specialized MRs, focusing on areas where pathways have been established through IDN to strengthen coordination with PCPs. I believe you can see that such factors as targeted DTC, BBM, SC AI, and others are creating an emerging search towards demand of expansion for LEQEMBI, and a progress towards achieving the full-year sales forecast is proceeding smoothly in the U.S. as well.
Next slide, please. The differences between IV infusion and SC AI are summarized in the table below. Both IV infusion and SC AI are maintenance therapies, and they start after the initial 18-month treatment period.
IV is administered once every four weeks, while SC is administered weekly. The administration time is one hour for IV and an average of 15 seconds for SC AI with auto-injector. IV is administered by HCPs at the hospitals or infusion centers, while SC AI is intended to be administered at home by the patient or caregiver. Some patients feel reassured by receiving LEQEMBI treatment at the medical facility. On the other hand, there are also patients whose families have to drive them long distances to the hospital for treatment. For such patients, administration at home by the patient themselves or their caregivers offers the advantage of reducing the burden of hospital visits and enhancing the efficiency of healthcare resources. This approach is patient-centered, and the introduction of SC AI is considered an important move towards the demand expansion phase in the U.S. Next slide, please.
In Japan, progress is being made in establishing pathways, and the demand continues to expand. Sales from wholesalers to medical institutions stood at 130% of the level of the previous quarter and, in July, saw a record high, demonstrating steady growth. Cooperation between primary care physicians and specialists is also progressing smoothly. For patients who have undergone treatment for more than six months, 1,500 facilities have agreed to serve as follow-up facilities, enabling the patients to receive treatment at nearby medical institutions that are more convenient for them. From the perspective of increasing the value of LEQEMBI, the significance of long-term administration has been discussed at Japan Academy of AD meetings, and understanding of this has been deepened. As for growth drivers, preparations are underway to add a new formulation of SC AI, with a potential submission targeted for this fiscal year.
Additionally, ongoing disease awareness campaigns are contributing to increased awareness of MCI and encouraging patients to seek medical consultation. Currently, the second phase of the DTC campaign is underway. We are pleased to report that progress toward achieving this fiscal year's revenue forecast is proceeding smoothly. Next slide, please. In Europe, we are planning to prepare for launch in October. In Germany, preparation to meet European approval requirements is steadily underway. For six months, there will be reimbursement at discretion pricing, after which economic evaluation for formal reimbursement pricing negotiations will follow. In France and Spain, we're preparing with the aim of starting early access program in the third quarter. In Europe as well, we will be building pathways quickly to start contributing to patients. The other day, AAIC was held in Toronto, Canada. I would like to report to you the presentations made at AAIC.
At AAIC, including SC AI-related data, a large volume of high-quality data were presented. 48-month long-term treatment effect and real-world data. Data confirming equivalence of SC AI with IV maintenance dose and potential for safe administration at home by patients and caregivers were presented.
This is related to 48 months of continued treatment data. This showed the suppression of deterioration of dementia in this population, together with quality AD population. As for the treatment effects, comparison was made to the natural course of AD shown by ADNI and BioFINDER. In addition to Clarity AD population. At 18 months, difference with ADNI was 0.52, and with BioFINDER, 0.57. The difference was 1.75 and 2.17 , respectively, at 48 months. From these results, after 48 months of treatment in early AD, sustained benefits were shown. Case reports of 478 patients with early AD from nine medical institutions in the U.S. were reported. Disease stage, age, APOE4 status, et cetera, of 478 patients were shown to be similar to clinical trials. At the time of this case reports, 87.4% were continuing treatment. Average treatment duration was 375 days.
Aβ diagnosis was mainly given with PET or CSF, but BBM was also used. In the U.S., BBM test use is doubling every four to eight months. In particular, the use of p-tau217 is accelerating, and the use of BBM is increasing. 84% of patients did not progress to the next stage. Thus, very favorable results were obtained. As for adverse events, ARIA-E or ARIA-H incidence was 13%. Infusion-related reactions: 3%. There were no reports of deaths or serious bleeding events. Satisfaction with LEQEMBI treatment was high. Physician satisfaction was 8.7 out of 10. Patient satisfaction was 8.8, HCP caregiver 8.2, and HCPs 8.7. Two-year real-world data highlighted the favorable evaluation of lecanemab's efficacy and satisfaction of stakeholders. SC AI maintenance treatment. FDA approval action date of August 31st is fast approaching.
Using modeling and simulation approach, appropriateness of 360 milligrams weekly dosing for SC AI maintenance treatment was confirmed, while equivalence with IV maintenance treatment was also confirmed. In human factors study, safe and effective use of SC AI under development in expected use environment was examined. SC AI maintenance dosing appropriateness was confirmed based on clinical efficacy shown by CDR-SB, amyloid PET, and progression-predicting blood biomarkers. Regarding confirmation of equivalency with IV maintenance treatment after 18 months of IV initial treatment, 10 milligrams per kilogram monthly IV maintenance treatment and 360 milligrams weekly SC AI maintenance treatment showed similar PK/PD profiles and favorable safety profiles. In human factor study, which examines human behavioral and cognitive characteristics, safe and appropriate administration of SC AI by caregivers, patients, and HCP were confirmed, supporting safe and effective administration. Based on these results, SC AI maintenance treatments showed equivalence to IVIg maintenance treatment.
Human factors study supported administration by patients or caregivers in nursing homes or at home. SC AI maintenance treatment is expected to bring benefits such as reduction of overall healthcare system cost. Results of ARIA incidence rates between lecanemab and donanemab in indirect treatment comparison were presented at AAIC 2025. This study conducted indirect treatment comparisons using comparison with placebo of each drug, where placebo was the common comparator to understand safety differences between lecanemab and donanemab, such as ARIA outcomes and death. Results using Clarity AD and TRAILBLAZER-ALZ 2 are that the more towards left, the more favorable the results are for lecanemab. In comparison to donanemab, the results indicated that lecanemab has a lower risk of ARIA events. Using modified titration of donanemab, results indicated numerically lower risk for lecanemab in all ARIA-E and ARIA-H.
This network meta-analysis supports the indirect treatment comparisons using original dosing schedule of donanemab and supports conclusion that in patients treated with lecanemab in comparison to those treated with donanemab, ARIA incidence is lower. In ARIA comparison, once again, it was indicated that ARIA incidence is lower in lecanemab in comparison to donanemab, showing advantage in safety as well. I will now go over the progress towards implementation and wider usage of BBM for Aβ confirmatory tests. On May 16, U.S. FDA granted IVD clearance for Fujirebio's Lumipulse G. Leading clinical laboratory companies in the U.S. have adopted it and started its use in June. There is also development towards reimbursement in the U.S. U.S. Alzheimer's Association announced BBM clinical practice guideline. Looking at this guideline for monitoring, BBM criteria are clearly defined, and if criteria as confirmatory testing is met, replacement of PET or CSF is possible.
This is quite significant. The recommendations of the guideline are that BBM tests with 90% or greater sensitivity and 75% or greater specificity can be used as a triaging test and that BBM tests with 90% or greater sensitivity and specificity can serve as a substitute for amyloid PET imaging or CSF AD biomarker testing. The development speed of BBM and the evolution of diagnostic paradigms are taken into consideration in encouraging clinicians to stay informed about emerging paradigms such as biomarker combinations or ratios and multi-threshold testing that may further refine the diagnostic accuracy of BBM. Aβ confirmation by Aβ PET and CSF may be replaced with simple BBM, and accelerated social implementation of BBM can be expected, leading to streamlining and expanding of the capacity of pathway. The use of BBM in confirmatory testing is expected to be a major driver to expand demand. This is the summary.
In 48 months of continued treatment efficacy continues to expand compared with the natural course of AD, and improvement was shown in 56% of patients with low tau. With two-year real-world data after an average treatment period of more than one year, it was confirmed that about 84% did not progress to the next stage of the disease. High evaluation and satisfaction with efficacy were also confirmed. Concerning SCAI maintenance treatment, modeling and simulation confirmed equivalence to IV maintenance treatment in terms of exposure, clinical efficacy, and biomarkers. Appropriateness of administration by patients and caregivers at home or nursing home was indicated. Significant benefits are expected, including cost reductions in the entire medical system, streamlining, and increasing the capacity of treatment pathway. ARIA comparison through indirect frequent comparison indicated that lecanemab has a lower risk of ARIA events compared to donanemab.
A-beta confirmatory test using BBM is showing steady progress towards social implementation and wider usage. Hence, significant benefits are expected, including cost reduction in the entire medical system and streamlining and increasing of the capacity of treatment pathway. Preclinical AD AHEAD 3-45 is progressing steadily towards obtaining top-line results in 2028.
Moving on to update on Lenvima. Q1 global revenue from Lenvima was JPY 83.9 billion. In the U.S., the biggest market, steady progress at 104% year-on-year growth on constant exchange rate basis was achieved despite impact from IRA. Lenvima maintains top market share in renal cell carcinoma and endometrial carcinoma and top market share among TKIs in HCC and thyroid cancer. In terms of sustained value creation, Eisai received a favorable decision in high purity patent lawsuit, making significant progress toward LOE extension. Our IP strategy contributed to a maximization of value for patients.
In China, Lenvima combination therapy with TACE and KEYTRUDA was approved. Eisai is striving to make new contributions to the world's largest HCC market. We are making steady progress towards achieving global fiscal 2025 revenue forecast of JPY 312 billion. This is the summary of what I've presented today. Once again, I would like to point out that a search for demand expansion is emerging for LEQEMBI treatment at AAIC. 48-month continued treatment results and two-year real-world data were presented. For SCAI maintenance treatment, August 31 FDA action date is approaching. Our efforts to strongly appeal unique value that only LEQEMBI can offer is appearing in outcomes. I myself have felt the enthusiasm about and expectations for LEQEMBI treatment from KOLs at AAIC in Toronto firsthand. Eisai is now at a turning point.
That is how I feel, and through these efforts, we expect to cause a major paradigm shift. The initiatives that I've described today are shown here, and through these, we expect the change in revenues and profits towards achieving 8% return on equity in fiscal 2026.
We would like to have a Q&A session. We'd like to receive questions first from analysts, then we'd like to follow that session with Q&A session with media. I'm going to call you. When your name is called, please mention your name and affiliation before asking your questions after unmuting yourself. Please use the function for raising your hand. The first question is from Mr. Wakao from JPMorgan. Can you hear me? Yes. Mr. Wakao.
Yes, this is Wakao speaking of JPMorgan. Thank you very much. Thank you. Regarding the first quarter progress when compared to the internal plan in LEQEMBI China, excluding the one-time impact of China LEQEMBI business. I think that the progress for the first quarter has been faster than original plan. If that is correct, in what area of business the progress has been faster than original pace? If the same pace continues into the second quarter, do you think that there will be a chance for you to revise the full-year forecast?
Mr. Ike is going to respond to your question.
Thank you very much for your question. This is Ike speaking. Thank you for your question, Mr. Wakao . Regarding the actual results for the first quarter, which seem to be above the internal plan, exceeding the plan. The major factors are due to the three global major products, namely LENVIMA, LEQEMBI, and DAYVIGO, in each region have grown and exceeded the plan. That was the major factor. Regarding the advanced delivery of LEQEMBI products, that impact in China is excluded. Still, we saw the driving growth. There was some delay of the expenditure in R&D activities. In combination with SG&A expenses, we have been working on the structural reforms from last fiscal year in order to enhance the efficiency of expenditures in R&D. That have been bearing fruits.
If this cadence continues into the second quarter, which we would like to see, the upside revision may be considered at such time. We do not intend to make any revision to the current plan at this moment.
Thank you. Understood very well. Compared to this fiscal year's plan, I think that there was a plan to account for the one-time revenue. Do you think that there is no change to that?
Yes. Your understanding is correct.
Thank you very much. My second question is related to the trend of LEQEMBI business in the U.S. For April through June, the full basis results were much better than our expectation. I would like to ask you to explain the background for that. On 8/10, PBM and other measures and initiatives were explained. Other than that, compared to the past quarters, during the current quarter and the review, what changes have you seen? Competition for share of the market with donanemab, what is the current status?
Yes. For your question, Mr. Haruna is going to respond.
Thank you very much for your question. I am in charge of LEQEMBI business in the U.S. My name is Haruna. Regarding the share with the competitors, based upon the file data and making adjustments to the dosing frequency and the doses of LEQEMBI and Kisunla.
Based upon the calculated share, LEQEMBI takes about 75% of the market, and Kisunla having 25%. Actually, Kisunla was launched. Compared to the last quarter, LEQEMBI could achieve double-digit growth, and on the constant exchange rate basis, at 120% growth was recorded. Therefore, the launch of Kisunla has not slowed down the growth of LEQEMBI. AD market itself has been expanding because of the advancement of BBM and other diagnostic tools, and the market itself has continued to grow. Since the launch of LEQEMBI, 18 months have passed, and there are increasing number of patients who are transitioning to the maintenance treatment. The great majority of our patients are wishing to be transitioning to the maintenance. AD is a life-threatening and chronic disease, and early start of the treatment, as well as the continuous long-term administration, are being regarded as significant.
That has contributed to the continued growth. Earlier, our COO, Mr. Naito, reported on what was presented at AAIC, and a 48-month long-term administration data was presented, particularly for early-stage low-tau patient groups over the past four years. More than half of the patients have shown improvements. Therefore, in the actual clinical setting, the significance of LEQEMBI long-term administration has been demonstrated. Therefore, maintenance treatment as well as the benefit of SC AI for LEQEMBI are being approved. That we will be able to continue to grow in the third quarter onward.
Thank you very much. Comparing the fourth quarter of FY 2024 and the first quarter of FY 2025, do you think there has been any change? Because the growth seems to be much stronger, and we are still in the early August. Have you seen any change in the trend since then?
Again, Haruna is going to respond.
One piece of information for you in reference: regarding the quarter from April through June, there has been an increasing number of new prescribers. Particularly such new prescribers, compared to the last term, has shown the double-digit growth, out of which about 70% of them, new prescribers, are the ones who are prescribing the drug at the newly opened accounts. The prescription expansion is increasing during the quarter under review. For the past one month, July, because we have just entered August, we have seen such continued trend based on the weekly sales data, based on the demand. Last week, the demand was shown to be record high last week. It is obvious that we have been saying that there has been an emerging surge. Such emerging surge is continuing throughout the month of July, also into August.
Thank you very much. Just one last question—
Regarding the U.S. situation, Mr. Ike would like to supplement our answer.
Thank you. This is Ike speaking, Mr. Wakao. Regarding the LEQEMBI in the United States, Mr. Haruna responded to your question. I forgot to tell you in the outset, LEQEMBI in the United States for the first quarter of FY 2025 exceeded the internal plan. That is what I wanted to supplement.
Yes, understood. Lastly, just one simple question. Regarding BBM, there has been a guideline issued for that for the confirmatory test. What about the timing of Medicare coverage? This is my last question.
Mr. Haruna is also responding to this question as well.
Thank you very much for your question. For BBM pricing, recommendation has been already prepared that will be applicable from January next year. Reimbursement will be started from that timing onward. I see.
Thank you very much. Next, from Citigroup, Mr. Yamaguchi, please. Please unmute and please start.
Can you hear me?
Yes, we can.
Thank you. I've received a few updates regarding Europe. As for insurance, it seems that the views are critical. In the U.K., has there been any progress in negotiations?
Mr. Ike is going to respond.
Thank you, Mr. Yamaguchi, for that question. In U.K., it wasn't as expected regarding NICE; we have continued to engage in negotiations. If there are further developments, we would like to update you. Across the private sector, there may be foundations, and even without coverage, sales may start. Rather than that, are you going to wait until negotiations are finished with NICE? In the U.K., it is already sold by private sector.
Thank you. I also have a question regarding page 11, between IV and SC. Medicare will change. It is going to be after August 31st, from Part B to Part D. Are you prepared to support this transition of reimbursement from Part B to Part D?
Mr. Haruna is going to respond.
Thank you for your question. This is Haruna speaking. As you rightly pointed out, SC AI will be covered by Medicare Part D, the Medicare Part D is provided by private sector insurers. Depending on their insurance program, they have their own formulary list, and CMS will review the formulary list and approve
Approves. Usually, for a product that is launched outside of the cycle of Medicare Part D bidding, it will be delivered through a medical exception process. This process is initiated by a Health Care Professional or healthcare staff. This medical exception process is a process that is generally used in other therapeutic areas such as diabetes. This is a very general process. To support such a process, what we call the LEQEMBI Companion, this is our service team; there are account managers who support reimbursement through these services. Transition from Medicare Part B to Medicare Part D, patients who will be transitioning for maintenance treatment will be supported from the day of the launch of SCAI.
Next, Mr. Muraoka over at Morgan Stanley, please unmute yourself.
Thank you very much. This is Muraoka, Morgan Stanley speaking. Regarding the transition from Part B to Part D, as a follow-up question on the earlier question, pen was launched by another company; they were struggling in the switching from B to D. Regarding the injection formulation, that has been mentioned over the past several quarters. For your case, this process, do you think that it will take some time at some point in the transition, considering the demand for SCAI, do you think that there will be a smooth acceleration? For example, starting from the October-December quarter, is this somewhat the perception that we should have? What kind of dynamics do you have in your mind?
For your question, Mr. Haruna is going to respond.
Thank you very much for your question. Regarding SCAI, the level of expectation toward SCAI is very high. As COO, Mr. Naito, mentioned at the AAIC meeting, the presentations were explained. There was a high attention from physicians who you often mentioned as the key factor for change. I believe that this represents the very high expectation level from physicians and others to this therapy. On the other hand, regarding the Medicare Part D insurance process, it's something that we have to go through, we have to securely go through this process. Also, this is going to be a maintenance treatment. Therefore, after 18 months of the initial treatment is completed, the patients who complete initial treatment will transition to the maintenance treatment gradually. SCAI initiation. Once SCAI initiation therapy is approved and launched, there will be another surge. Thank you very much.
Let me clarify again. From B to D, in that switch process, you may struggle, and you won't be able to achieve the expected growth in the first quarter or second quarter. We won't be able to feel such a strong growth. Or do you think that instantaneously or quickly you will be able to see the growth as expected?
For your question, Mr. Haruna is going to respond.
Thank you very much for your question. Regarding the switch from Medicare Part B to Medicare Part D, we have a dedicated expert team, and we are preparing for a system to support patients and the switch, so we do not have any concern regarding this issue. We will be ready to go through this process in order to deliver the therapies to healthcare professionals and the patients. On the other hand, eligible patients for SC AI treatment is those who have finished the initial treatment. Therefore, we believe that the number of patients eligible for SC AI is going to increase gradually.
Thank you very much. After finishing the 18-month initial treatment at the end of August, how many of such patients will there be? Do you think that it will reach 10,000?
Mr. Haruna is going to respond.
Thank you for your question. Regarding the number of patients, we do not disclose the number of patients currently, so we would like to refrain from making comments on that. I would say that at the next earnings call, we would like to give you a clearer update on SC AI penetration.
Thank you very much. Regarding the E2086 overnight coproxyl treatment, at World Sleep, I believe that you are scheduled to make a presentation. Takeda, the profile is becoming clearer. Currently, as far as you have information, what do you think is the differentiating factor as the latecomer?
Mr. Ido is going to respond.
I am Ido, in charge of R&D. I am going to respond to your question. As you pointed out, at World Sleep Congress , there will be oral presentation to be made on our data. We would like to present our detailed data then. Currently, this drug is going to be administered once daily. Also, PK profile for this type of a drug is going to be very important; this drug has an ideal profile. That is to say, during the day, the awakeness will be maintained, and this will not have a carryover effect. On top of that, based upon the results, MT1, type 1, and type 2 as well, will be covered by this drug. Therefore, we have a high expectation, and I hope that we'll be able to present that data at that time.
Thank you very much.
Next. Sorry, Tony Ren from Macquarie. Please mute and please state your question.
Hi, can you hear me?
Yes, I can hear you.
Okay. Yeah. Perfect. A couple of questions on LEQEMBI. Congrats. Very strong results. On slide number 16, you guys showed real-world data where the incidence of ARIA is roughly 13%, right? Compared to the Clarity AD trial, there you have 21.3% ARIA incidence. This is much, much lower. Any reason why is this so much lower in the real-world setting? Is it just because it's a very small number of 178 patients?
Mr. Toyosaki will respond to your question.
Thank you for your question. I'm responsible for medical affairs in the U.S. My name is Toyosaki. Thank you very much for your question on ARIA. About ARIA-E and ARIA-H incidence, in comparison to Clarity AD, real-world data is at a lower level. This is not only five-year real-world evidence, but according to presentations by other doctors from other centers, the incidence level is similar to Clarity AD or lower.
Are there any specific reasons that the level is lower, though we're not discussing the presentations?
The impression of the physicians in their daily practice is such that in comparison to strictly centrally evaluated Clarity AD results, and this may differ from center to center, but ARIA-E, ARIA-H incidence is not seen as problematic in a real-world setting. I believe that physicians are adequately managing and controlling robustly in the actual clinical setting. Going forward, about the adequate control of adverse events, we would like to continue to make thorough efforts. Thank you for your question.
Thank you. Perhaps, just a quick follow-up on your advantage on slide 18. Your advantage against Eli Lilly's Kisunla when it comes to ARIA. The data, the advantage is assuming Kisunla dosed using the original schedule. You know that Kisunla is now being dosed at a more gradual titration schedule. Do you think you can maintain your ARIA advantage over Kisunla with their new slower dosing schedule?
Mr. Toyosaki will once again respond to your question.
Thank you for your question. Regarding ARIA incidence, together with efficacy for patients who receive treatment, ARIA incidence is very important information, as we believe. At AAIC, in the trailblazer study, in addition to standard dosing in TRAILBLAZER-ALZ study and also modified titration dosing in TRAILBLAZER-ALZ study study. In comparison to these, advantage of LEQEMBI is shown. As indicated on this page, in comparison to modified titration dosing, ARIA risk numerically is lower for LEQEMBI. As for AE incidence, the advantage of LEQEMBI, even in comparison with a modified titration, we believe can be maintained. Thank you.
That's certainly very reassuring. If I could just add a quick question on slide number 28 for your China LEQEMBI sales. Because of your inventory building there. Looks like you're only looking to sell another JPY 1.8 billion worth of LEQEMBI in China. I just want to confirm my understanding is correct. This looks fairly low number for the rest of the year, three quarters.
That question will be addressed by Ms. Sasaki.
Thank you for your question. I am responsible for China. I am Sasaki. Right now in China, very smoothly, prescription is increasing and number of new patients is increasing according to the plan. That is the situation. As for the number that is shown today, we believe that this is prudent. To avoid a tariff risk, distributors are building up inventory. This number, in comparison to plan, is showing good progress vis-à-vis the plan.
Okay. Very good. Yeah. Thank you very much. Appreciate it.
UBS Securities. Sakai, Mr. Sakai of UBS Securities, please unmute yourself.
Yes, this is Sakai of UBS Securities speaking. I have two questions. It's a qualitative question. Eli Lilly is somewhat forcing the same substance, donanemab. Pre-symptomatic AD is targeted in their clinical trial, which has been started. In early next year, interim results, analysis results will become available. Roche is conducting Brainshuttle. For your Leqembi, the commercial strategy in the U.S. in particular, do you think there will be any impact on that? I don't think there are any measures that you are taking because they have not launched yet. You may have various ideas. If you can share with us such ideas, that would be very helpful. That is my first question.
Dr. Lynn Kramer is going to respond.
Yes. Thank you for the question. I'm the chief clinical officer. Of course, your question is focused on the preclinical AD indication. We have our AHEAD 3-45 study, that is a protocol that has been agreed with the FDA and can truly evaluate preclinical AD. We're confident that by removing both protofibrils and plaque when present, we will have a positive result. However, there are differences in the trials from donanemab, in which one-third of the patients have global CDRs of 0.5, which is MCI. While in our AHEAD 3-45 trial, there are no patients with global CDR higher than zero. All patients in the trial are actually preclinical AD. We believe that that will be a critical impact in the results of the trial. We have somewhat different endpoints. Their endpoints are looking at the conversion to the next stage.
We have a primary endpoint of the PACC5, which we believe is a more sensitive endpoint, and also secondary endpoints that are focused on change to the next stage of disease. We believe that our study more accurately represents the preclinical population, and our results we expect to be robust. Thank you.
Just follow-up. You said preclinical. We are really talking about pre-symptomatic. Are there any big difference between two definitions?
No, that's the same. Obviously, if you have a CDR global of 0.5, you are not pre-symptomatic. You are symptomatic, and that's the definition of MCI. The preclinical means that the patient has no cognitive impairment and has either intermediate amyloid, which means it's building up, or elevated, just as in the Clarity AD trial, but no symptoms. There's a difference in the two studies in what is being evaluated. People with symptoms already are covered by the existing label for both drugs. Their study is somewhat different than ours in the population they study. Is that clear?
Yes. Just one more. The biomarker. Are you setting up any biomarker, pre-symptomatic or preclinical patient?
Yes. Many biomarkers are being evaluated just as they were in Clarity AD. That are many of the standard biomarkers, such as p-tau217, the Aβ42/40 ratio. We'll also be looking at our biomarker MTBR-tau243, neurogranin, many.
Okay. You have identified biomarkers already?
Yes, many. In the protocol.
Okay. All right. Thanks.
Regarding the, there is a follow-up response from Mr. Ido regarding the Brainshuttle antibody, trontinemab. Ido is going to respond.
Regarding the trontinemab, this is an amyloid antibody with the combination or binding of a Brainshuttle. In the creation of this antibody drug, what is most important is the toxic core. What is going to be captured by this antibody is very important. It's not about how much antibodies can transition into the brain, how quickly. The donanemab session was held with four oral presentations in the AAIC. Regarding the data for the cognitive function, there was no presentation on that. This time, the plan for phase III study was presented as well. Regarding the steroid for infusion reaction may be required, and exclusion criteria includes the exclusion of the patients with over five microhemorrhages.
That means that unless ARIA incidence becomes zero, MRI monitoring will continue to be conducted. That means that the pathway needs to be established from scratch until this drug is approved. Leqembi would have had accumulate the real-world data over five or six years. At such time, shortly, SC AI use will be started in a phase III donanemab according to the plan of the phase III trial of donanemab. There was no specific mention, they described the IV or equivalent to IV, and a preclinical indication may become available at such time. We do not believe that the position of Leqembi will be swayed by the launch of this drug.
Thank you very much. I'm sorry. Regarding the commercial strategy of Leqembi in the U.S. currently, how much of the percentage of PCPs are already using the Leqembi? Once they started to use this treatment, there will be repercussions, and it may become more difficult for them to manage ARIA.
For your question, Mr. Haruna is going to respond.
Thank you very much for your question. This is Haruna speaking. Regarding PCPs, account for about 10% of all the prescribers. The PCPs are introducing Leqembi treatment on themselves. On the other hand, among PCPs, there are many patients with MCI or early AD being seen by PCPs. Not only starting Leqembi treatment on themselves, but they are referring patients to IDN, where there are specialists available, and that will become important. As we introduced today, starting from the third quarter, PCP-specialized MRs will be assigned. That they would be able to provide information on Leqembi as well as promote referrals of PCP patients to specialists, neurologists at IDNs. These will be pursued. The activities targeting PCPs will be further enhanced. Thank you for your question.
Thank you very much. Next, Ms. Sogi from Bernstein, please. Please unmute; please start with your question.
Thank you very much. The other day, in Japan, Chuikyo determined the drug price of LEQEMBI; that is the question. Cost-benefit analysis, according to that, LEQEMBI's value should be one-third to one-fourth of the current prices. That is the view shown by Chuikyo. What is the background of this? What is the data analysis that led to the determination of LEQEMBI value being one-third to one-fourth of its current price? A 15% drug price reduction may be imminent, according to my understanding. What is the timing of the actual price reduction? One-third to one-fourth, together with that determination, will drug prices be lowered quite dramatically and rapidly?
Mr. Yusa will respond to your question.
Thank you for your question. I am Yusa, responsible for Japan business. As you pointed out, at this time, regarding HTA, first, there were press news reports. In a medical setting, we are hearing from physicians and healthcare professionals, and we are responding to their inquiries. As for their inquiries, the background of HTA, for example, difference between the company's analysis and the public analysis , is well explained to physicians and HCPs. Currently, we are not seeing any negative response from health professionals. It is called cost-benefit analysis, but only clinical trial data is used, and real-world data is not reflected. The major difference between company analysis and public analysis is that we have issued a press release. For one thing, in company analysis, AD pathology is taken into account. Beyond 18 months, treatment continues; the effect of that treatment continues. That is the assumption for our analysis.
In HTA, turning to the last part of your question, public analysis assumes that the administration stops. We expect treatment beyond 18 months in our analysis. On the other hand, in the public analysis The treatment period is limited to 18 months, and after 18 months, public analysis assumes that there is no effect of LEQEMBI after 18 months. These are major differences, and in our company analysis, caregiver's QOL is directly reflected. In public analysis, the care burden only is taken into account, and only part of that difference is reflected. In looking at these differences, the model used in the analysis included. The analysis is carried out in completely different way, and that has led to the results of HTA.
One-fourth of the value—that is not completely our view. Not at all. We expect that there will be a formal decision on drug price revision, and the effective date we expect will be announced eventually. We are already making estimates of that impact on our fiscal 2025 revenue. We consider that there will be no problem in achieving a full-year JPY 24 billion revenue, and we will continue to make thorough preparations to respond to such impact.
Thank you. I have a follow-up question. Regarding public analysis, I don't think it is persuasive for Eisai, but under Japanese system, is it possible to challenge public analysis?
Once again, Mr. Yusa will respond.
Thank you for your question. Regarding that point, regarding the deliberations of Chuikyo, we have been engaged in exchange with the authority on the analysis. Going forward, we will continue to communicate the value of this drug, seizing various opportunities, including by citing data from actual clinical setting and various other data, to inform the public of the value of LEQEMBI.
I have one more question. As for the view expressed by Chuikyo, is there any inquiries from overseas payers about the views expressed by Chuikyo?
Thank you for your question. None so far. Thank you.
In the interest of time, we would like to move on to the Q&A session for the media. If you have any questions from the media, please raise your hand. From Nikkei Shimbun, Banno-san. Please unmute yourself.
Yes. This is Banno speaking. Ms. Banno from The Nikkei. Can you hear me?
Yes.
Thank you very much. I would like to ask about the tariff and MFN, most favored nation treatment by the U.S. Regarding the tariff, I believe there are uncertain points, but there may be a 200% tariff imposed on pharmaceuticals. What kind of impact do you see on the performance for this fiscal year? What kind of measures are you taking currently? Regarding MFN treatment, which was announced the other day, this does not include Japanese companies yet. I wonder what will happen. Now Biogen or Eisai Inc., I would like to know whether you have been engaging with the U.S. administration. If that system is introduced, what kind of a potential impact on your performance?
For your question regarding the tariff part, Mr. Ike is going to respond.
Thank you very much for your question. This is Ike speaking. Regarding the tariff to be imposed by the U.S., we still do not have a specific one; the timing when such new tariffs will be imposed is not clear yet. On the other hand, as we reported to you earlier, the inventory and supply chain in the U.S. have been enhanced in order to minimize the impact of tariffs if and when tariffs are imposed. That is my response to your question about the tariff. Mr. Yasuno is going to respond to your question about MFN.
Regarding your question about MFN, Mr. Yasuno is going to respond.
Thank you very much. I am in charge of U.S. business. This is Yasuno speaking. Regarding most favored nation pricing for pharmaceutical products, that has been already known to you because letters have been sent to 17 pharmaceutical companies in the West, in Europe and the U.S. by President Trump on July 31st. Let me share with you the four conditions for that. MFN pricing shall be provided for Medicaid, which is a public insurance system for low-income earners. A second condition is that the most favored nation pricing shall be provided for products to be launched going forward. The third one is that strengthening price negotiation in other countries than the U.S., and the increased revenue shall be used to lower prices in the United States.
Utilizing the direct-to-consumer or direct-to-business model will be utilized without having the intermediaries, and high-volume and rebate products shall be offered with MFN pricing. These are the four conditions. These were all mentioned and demanded to the pharmaceutical companies when the executive order was issued in May. There has been no change to that. These are not legally binding yet as well. These are the responses that are expected to be done on a voluntary basis by pharmaceutical companies. Therefore, these are not legally binding. Regarding your question, we have not been engaging with the administration or government, whereas we have not been contacted regarding the specific products, and we have not received the letter that has been sent to 17 PhRMA companies. We have a team in Washington, D.C., in the U.S. This D.C. office team has its unique proprietary network.
Also, we are working with PhRMA in the United States. Through PhRMA as well, we will continue our engagement with the Trump administration in order to identify how specifically this most-favored nation treatment will be conducted. With that, we would like to take necessary measures.
With that, we would like to end today's briefing session on the financial results from Q1 fiscal 2025 of Eisai Co., Ltd. Thank you very much for attending today.