We begin the briefing session on the financial results from Q1 2027 of Eisai Co., Ltd. This will be held in hybrid format, including in-person attendance online. Please join us. Please download the briefing materials from the website. I would like to introduce the speakers today. Mr. Keisuke Naito, COO and Chief Growth Officer, and Mr. Takuya Oyama, CFO and Chief IR Officer. Next, Mr. Oyama, CFO, will present Q1 Q2 Financial Results. After which, Mr. Naito, COO, will report on the overall business. Mr. Oyama, CFO, please.
Good evening. Thank you very much for gathering to attend this session out of your busy schedule. Let me begin with our financial highlights for the first quarter of fiscal year 2027. Revenue for the first quarter of fiscal year 2026 was JPY 234.3 billion, a 15.6% increase from a year- on-year. The pharmaceutical business, which is our organic business, grew significantly countries, achieving double-digit revenue growth. Operating profit reached JPY 24.7 billion, 19.2% increase year-on-year. This double-digit increase was achieved thanks to significant global growth in our major products, LENVIMA, DAYVIGO, and Leqembi. Progress towards our 2026 performance forecast is steady, with revenue up 27% and operating profit up 35%.
Next slide, please. This page provides details of our consolidated financial results for the first quarter of fiscal year 2026. Revenue increased by 16% to JPY 234.3 billion, driven by the growth of our pharmaceutical business, which is centered on our major products, 3L, LENVIMA, DAYVIGO, and Leqembi. Cost of sales was JPY 51.1 billion, and the cost of sales ratio to revenue was 21.8%. Although the cost ratio increased year- on- year, it was approximately controlled within the planned range through cost reduction efforts. As a result, gross profit reached JPY 183.2 billion, up 14.5% year- on- year. R&D expenses increased by 12.7% to JPY 43.7 billion, reflecting a proactive investment of resources in next-generation key projects. Selling and general and administrative expenses increased by 14.6% to JPY 114.8 billion due to increased profit-sharing expenses associated with the LENVIMA revenues and aggressive proactive investment in the campaign.
As a result, Operating profit was JPY 24.7 billion, up 19.2%. Core operating profit was JPY 24.7 billion, a 13.9% increase. The profit for the period was JPY 18.2 billion, up 26%. Progress towards achieving the full-year forecast is on track, with revenue at 26.5% and operating profit and core operating profit at 35.3%. Next slide, please. This page shows the factors that increased or decreased revenue, as shown by the set of light blue bars from the left. Revenue for our major products 3L, LENVIMA, DAYVIGO, and Leqembi increased by JPY 24.8 billion from the previous year, and revenue for our pharmaceutical business expanded by 16% to JPY 230.9 billion. Revenue of products other than the 3L was also strong. Overall revenue increased by JPY 31.7 billion - JPY 234.3 billion. Next slide. This page shows the factors that caused increases or decreases in operating profit.
Gross profit increased by JPY 23.2 billion due to growth of the pharmaceutical business driven by the growth over 3.6%. R&D expenses increased by JPY 4.9 billion due to continued proactive investment in key projects such as the clinical trial of Leqembi for preclinical AD and the anti-MTBR tau antibody E2814. SG&A expenses increased by JPY 14.7 billion due to higher profit sharing expenses associated with LENVIMA revenue growth and proactive investment in the Leqembi. There are no other significant factors contributing to increases or decreases in other income and expenses. As a result of the above, both operating profit and core operating profit reached JPY 24.7 billion, representing significant increase in profits.
While we had planned to achieve profitability in commercial businesses this fiscal year, excluding the Leqembi R&D expenses, we posted our first-ever profit in first quarter 2027 thanks to the continued strong growth, ongoing cost control, and the prioritized allocation of the T&M business to key markets. We will continue to work diligently towards achieving full commercial profitability. This concludes my part. Next, our COO, Mr. Naito, will give us an update on our business. COO Naito, please.
From here, I will explain the recent business progress and the pipeline that will support medium to long-term growth.
First, I will present business update for the three products: LENVIMA, DAYVIGO, and Leqembi, which are driving our growth, so-called the three "big products." In particular, regarding Leqembi, I will explain the progress toward maximizing its value from a perspective of , IQLIK, subcutaneous injection with auto-injector approved in the U.S. for initiation treatment and establishment of a treatment form, connects its high dose of convenience to access to treatment, the real-world evidence supporting the long-term treatment value presented at AAIC 2026, and the implementation of blood-based biomarker for BBM. Regarding the pipeline, I will explain the progress of next-generation AD disease-modifying drugs including the announcement of the Etalanetug Biomarker Diagnostic App by Eisai. I would introduce our drug discovery aimed at realizing Make Age-Dependent Disease, where amyloid, tau, and neurodegeneration are considered as an AD continuum, the Orexin Pathway Platform, and the future key medicine pipeline.
Let's talk about LENVIMA. LENVIMA Q1 2027 revenue reached JPY 97.3 billion, up 16% year-on-year. In addition to the impact of exchange rates, sustained demand growth, particularly in the U.S., is driving this growth. In the U.S., Eisai continues to hold a top market share in the TKI market for renal cell carcinoma and endometrial cancer, hepatocellular carcinoma, and thyroid cancer. 11 years after its launch, it has grown into a strong revenue foundation for our company, contributing to approximately 620,000 patients in 83 countries. The addition of a new indication based on the results of LITESPARK-011 for patients with advanced renal cell carcinoma with prior treatment with anti-PD-1 or PD-L1 therapies is scheduled to reach a PDUFA action date. The target deadline for FDA's review in the U.S. on October 4th, 2027.
We aim to achieve our full-year forecast of JPY 345 billion through both the sustained growth of existing indications and the expansion of indications through lifecycle management. Next is DAYVIGO. First quarter revenue reached JPY 18.9 billion, up 38% year-on-year, with growth across all regions. We are on track to achieve our full-year forecast of JPY 73.5 billion. In Japan, supported by its ability to improve both sleep onset and sleep maintenance, it has maintained the number one market share in both sales and the number of patients treated in the dual orexin receptor antagonist segment, according to our estimate based on JMDC data. It has continued steady growth in the U.S., Canada, and China as well. Furthermore, in July, we submitted applications for approval in the U.K. and Europe for the treatment of chronic insomnia.
Having already been approved in 29 countries and territories, it will further accelerate growth as a global brand. The knowledge we've gained in orexin drug discovery with Eisai is also leading to our next-generation orexin platform, which I will explain later. Next, please. Next is Leqembi. First quarter revenue reached JPY 29.3 billion, up 27% year-on-year. Excluding our estimated temporary impact of stockpiling by distributors in China that occurred in the same period last year, revenue increased by 64% year-on-year, indicating continued strong growth on a real demand basis. In the U.S. in particular, supported by the increasing number of patients with early AD and the expansion of blood biomarker testing volumes, Leqembi continued to grow, maintaining its leading share in terms of the number of patients treated based on our estimate. Furthermore, on July 13th, LEQEMBI IQLIK was approved by FDA for initiating treatment.
In Japan, demand is expanding while absorbing the impact of drug price rises. In China, reimbursement has commenced under several commercial insurance programs, and negotiations with authorities for reimbursement are ongoing in various countries across India. Currently, we have obtained approval in 53 countries and territories for early AD. We aim to achieve our full-year forecast of JPY 143.5 billion by leveraging new technological innovations such as IQLIK and BBM to drive growth.
I'd like to share with you our efforts to maximize the value of Leqembi. Leqembi is the only anti-Aβ antibody that can be administered long-term that suppresses the disease progression as well as slows the decline in cognitive function and activities of daily living. In the U.S., On August 13th, initiation treatment approval was granted and sales is expected to begin in late August. With this approval, from the start of the treatment, patients are able to choose from IV or IQLIK. From the initiation therapy to maintenance treatment options can be offered based on patient circumstances. The major value of IQLIK comes not only from its convenience. But after two consecutive treatments under the guidance of healthcare professionals, home administration becomes possible for patients when deemed appropriate. This reduces the burden to travel to clinics for patients and care partners.
It also is expected to reduce burden on medical institutions in terms of infusion-related human resource and equipment need. Eisai's AAIC 2026 modeling and simulation-based analysis was presented showing equivalent exposure between once-weekly subcutaneous and IV treatment and projected equivalency clinical efficacy in Aβ removal. Exposure-related AEs are projected to be similar to IV administration, and the safety profile of SC administration is generally similar to IV. According to the device evaluation, 94% responded that it is easy to use. We believe IQLIK will expand the treatment options for patients, making Leqembi treatment easier to start and to stay on. On the other hand, approval and sales of products alone do not lead to the start of actual treatment. To translate convenience offered by IQLIK to improved patient access and Leqembi growth, development of three key foundations is important.
First, streamlining the treatment access including coverage and reimbursement and prior authorization. Second, standardization of diagnosis and treatment initiation flow from testing to documentation of results, benefits verification, participation in coordination with specialty pharmacies. Third, enhance support structure for home administration and treatment continuation, including drug delivery administration training, storage, and continuous shipping management, and sending reminders about drug administration and MRI. Our aim is to establish conditions not only for clinics to prescribe Leqembi but for patients to actually start receive treatment and continue with treatment. Towards the launch in late August, we will proceed in collaboration with the payers, medical institutions, and specialty pharmacies to ensure the establishment of the three key foundations. We will translate the convenience of IQLIK into better patient access and advance the company into the next phase of medium-term growth. Next, turning to real-world data that demonstrates long-term treatment continuation.
This is not RCT, but this is an observation data using chart. Eisai AAIC 2026 LEADER study data from 432 early AD patients across 13 clinical practices in the U.S. was presented. 82.5% of patients whose disease stage were evaluated were stable or improved. Treatment retention rate was 86.7%. 6% at the time of chart extraction of all 432 patients. Safety observations were consistent with the FDA-approved label. Most ARIA events were asymptomatic or mild by imaging. There were no reports of macrohemorrhage or treatment-related deaths. Among 204 patients treated for more than 18 months who continued to be on treatment at the time of chart extraction, 161, or 78.9%, In addition to maintenance treatment with IQLIK or IV and remaining treatment based on these, we considered the data of the Q1 2023 report that supports the Leqembi treatment continuation, consistency in safety, and the current usage of maintenance therapy.
To maximize treatment efficacy with Leqembi, it is important to standardize Aβ diagnosis and to improve patient outcomes. Lab-based biomarkers put less burden physically on bodies and can alleviate geographic constraints and PET and CSF testing capacity constraints. By using BBM as triage for PET and CSF, Aβ positivity rates can be increased to efficiently use limited testing resource. BBM that satisfies certain performance standards may be a means of Aβ pathology confirmation in place of PET or CSF. According to estimates by Eisai, in the U.S., BBM tests increased in number by 75% in fiscal 2025 year-over-year. The ratio of BBM in Aβ confirmatory testing is expected to increase from 15% in fiscal 2025 to around 50% in fiscal 2028. The environment surrounding BBM is rapidly becoming ready centering around p-tau217 in the U.S., Europe, and Japan.
There has been progress in approval, regulatory filing, and commercial testing availability. Development of guidelines and treatment infrastructure is accelerating. With BBM, we intend to expand the base of patients who will seek diagnosis and reduce time required for diagnosis to expand the Leqembi treatment initiation opportunities. The combination of BBM for diagnosis and Eisai for treatment are expected to improve the overall flow from diagnosis to treatment continuation for patients. I would now like to turn to the next-generation AD drug discovery. Etalanetug is at the core of tau aggregates and targets MTBR-tau, responsible for tau propagation. Through binding with tau C, etalanetug promotes removal of microglia to suppress tau removal in microglial cells to suppress tau propagation and aggregation. Study 103 in Dominantly Inherited Alzheimer's Disease patients achieved 63% reduction of eMTBR-tau243 in CSF in three months and 89% reduction in nine months.
78% reduction in plasma in three months and over 90% reduction in nine months were also observed, demonstrating consistent changes in biomarkers in both CSF and plasma in tau. The tendency of suppressing progress on reducing tau pathology was also observed in each participant. As of now, these do not demonstrate efficacy in clinical symptoms, but we believe that lowering of eMTBR-tau243 and tau PET tendency support the effect of tau pathology targeted by etalanetug. And we believe that proof of mechanism was obtained. As presented at AAIC, plasma eMTBR-tau243 may potentially be used as blood biomarker for more convenient way to evaluate tau pathology in the brain. Next important data to consider will be the top-line data from phase II study in Sporadic AD patients expected in fiscal 2027 and from Tau Next Gen study expected in fiscal 2028.
About tau and tau ADI, I have just discussed, but ADI progression is considered in three domains of Aβ amyloid, sleep, tau, in neurodegeneration. As we pursue the next generation drug discovery regarding amyloid in AHEAD 3-45 study in preclinical for AD patients before the onset of cognitive symptoms, to demonstrate that AD would not develop the can be tested. This is a phase III study designed based on FDA and EMA guidance. We expect to complete it in 2028. Preclinical AD population is estimated to be 400 million globally, but not all will be target patients. Considering testing, diagnosis, and treatment access, Eisai assumes that there are approximately 2.3 million patients for AD DMT treatments. We intend to select target patients with biomarkers and aim to respond to the unmet medical needs of intervention before the onset.
As for tau, etalanetug aims to suppress disease progression through intervention of tau propagation. In the future, we expect to combine Aβ pathology control with Leqembi and tau pathology intervention with etalanetug. Moreover, by adding interventions in neurodegeneration and neuronal function, we aim to establish treatment approach to prevent onset and progression of AD. We call such long-term vision of combining pre-onset intervention and suppression of disease progression make AD curable. Next, moving on to our same platform, Eisai has been addressing sleep-wake regulation in insomnia with DAYVIGO, which blocks orexin receptor. Leveraging expertise from that drug discovery, currently we are developing lerasorexton, an in-house developed agonist which activates orexin 2 receptor agonist. In Study 101 in patients with NT-1, it was shown that single-dose administration significantly reduced excessive daytime sleepiness. At the dose that demonstrated efficacy, lerasorexton was considered well-tolerated with no liver dysfunction or visual abnormalities observed.
Currently, Phase II Study 202 evaluating NT-1 and NT-2 in the same study is ongoing. Topline data is expected before the end of fiscal 2027. This strategic setting for Eisai's progress in orexin drug discovery is not limited to insomnia treatment. Nighttime sleep is supported by DAYVIGO while daytime wakefulness is supported by Lerasorexan. We are developing these from both directions and in the future we aim to expand the potential of orexin drug discovery to regulation of brain function networks that support daytime functioning including cognition, behavior, and social participation. This page shows the major pipeline events and strategic positions of each project in the three-year plan. In neurology, after the U.S. approval of IQLIK, initiation treatment approval in Japan is expected in Q2 fiscal 2026. That is, Orexstar Phase II top-line data as well as E2025 CSF biomarker data are also expected in fiscal 2026.
In the medium term, important data is expected from Sporadic AD in the LEADER study or 2-2 study in fiscal 2027 and from AHEAD 3-45 and Tau Next Gen in fiscal 2028. In oncology, for LENVIMA and belzutifan combination therapy, U.S. PDUFA action date is scheduled in October 2026. serpilulimab regulatory filing in Japan and E7386 top-line data are also expected. These events are linked to our three-year plan strategy establishing Leqembi as standard of care, making DAYVIGO a global brand, next-generation drug discovery including etalanetug, and enhancement of oncology pipeline. By determining the scientific and business values and success probabilities of each project based on strategic positioning, resources will be allocated and plans will be executed according to the priority ways so that 3-year plan can be achieved. I would like to summarize the key points from today before I end.
In regards to management foundation, the strength of three growth products, namely LENVIMA, DAYVIGO, and Leqembi, drove year-on-year increase in both revenue and operating profit company-wide. We are making steady progress towards achieving the fiscal 2026 forecast. In terms of business growth, Leqembi continues to achieve sustained growth, primarily driven by the U.S. DAYVIGO Growth across all regions accelerated global expansion. With respect to Leqembi, IQLIK is offering more options for treatment. BBM is advancing diagnosis and treatment. Combining these advances, we are enhancing foundation to expand diagnosis and treatment access for patients. In product development, in neurology, Based on Eisai framework of continuum of amyloid tau and neurodegeneration, we are pursuing next-generation AD drug discovery. In orexin, leveraging the sleep-wake regulation, we will expand drug discovery possibilities to daytime functions of cognition, behavior, and social participation.
In oncology, in addition to LENVIMA, additional indications, licensing products, and in-house products will be combined to enhance pipeline for the future growth. Going forward, we will continue to enhance the revenue earnings foundation with three growth products, and we will also drive growth through next-generation drug discovery. We will create a cycle of investment that links the current growth to the next wave of phase of growth. It's just a resource allocation and steady execution to achieve significant enhancement of corporate value.
We prepare a Q&A session, first from the analysts and then questions from the members of the media. If you have questions, please give us your name and organization name before your question so that we can entertain many questions, as many questions as possible. Please limit the number of questions to one per person. I would first like to invite questions from the press.
Mr. Yamaguchi from Citigroup, please.
Please unmute your microphone and start asking your questions.
Hello. Can you hear us?
Yes, okay.
Thank you. This is Yamaguchi from Citigroup Securities. I am asked to limit the number of questions to one. Regarding the progress of Q1, I would like to ask you questions in one question. There is a high rate of revenue growth in the medium-term plan, however, year-on-year decline was observed through the gross profit. However, as the start of the fiscal year, I think this is relatively good gross profit. Do you have any take on this progress against the plan as well as the gross profit and on forex? Any better impact or positive impact from forex than expected? Could you please share with us?
Thank you very much for your questions. Our CFO Takuya Oyama is going to respond to your questions.
Thank you very much for your question. For the first quarter, given the strong growth of 3L products as well as other products and organic business continued to grow, therefore, operating profit was better than the previous forecast. During the first quarter, our plan for the first quarter was exceeded by the actual results. Regarding revenue, as you see, there was impact by foreign exchange rates, but excluding forex impacts, even after that, the result exceeded our plan and forecast.
Let me ask you one follow-up question. Leqembi and DAYVIGO revenue has been strong, and our product mix has been improved. The Leqembi and DAYVIGO individually cost of sales have been reduced for each of these.
Yes, the cost for individual products have been reduced.
Compared to your expectation for the full year forecast.
We believe that we have been able to make a steady start, good start, to achieve the full year forecast.
Next, please welcome from UBS Securities. Please unmute and proceed with your question.
This is Seki from UBS. Thank you for the presentation. Congratulations on the approval of IQLIK initiation treatment. About the Medicare reimbursement possibilities starting from next month, what is your view? I believe that there is a window open for Eisai in August, according to the information that I've heard, will be making use of that. Although it was past deadline when approval was given, is it possible to still receive insurance reimbursements starting next month? They can be either one dose, and I believe he was the same viewer, or number not ordinarily, the Medicare insurance reimbursement for initiation treatment. What is your current outlook?
Thank you for your question. IQLIK initiation treatment, and the question was on insurance reimbursement.
Regarding maintenance treatment, through medical exception, insurance reimbursement is provided. Therefore, for IQLIK initiation treatment, we expect a similar scheme to be applied. From 2027, payers will begin to list Leqembi in Medicare Part D formulary. In this way, we expect expansion of reimbursement, but based on priorities, we would like to work on ensuring reimbursement from major payers. I hope this addresses your question.
Thank you. Mr. Haruna, responsible for Leqembi in U.S., may have additional comments.
Thank you for your question. I am Haruna, responsible for Leqembi globally. I'd like to offer some additional comments. Mr. Naito responded earlier. In particular, regarding the formulary listing, maintenance therapy and initiation therapy, we expect to have both on the formulary. Initiation therapy approval was granted recently, and therefore we expect a listing in the formulary for both maintenance and initiation therapy eventually.
I would like to invite the next person to ask questions from JP Morgan Securities. Mr. Muraoka, please unmute your microphone.
This is Muraoka from JP Morgan. Thank you very much. I also have a question about the U.S. situation of Leqembi, particularly IQLIK for initiation treatment, work or price, and also contribution by IQLIK can be expected at this timing. Could you please elaborate on this and work for IQLIK considering the news release regarding the IQLIK in the U.S., 250 mg per bottle of $385 per vial. That means the price can be double the price of maintenance treatment. With this pricing, do you think that you will be able to secure sufficient profitability?
Thank you very much for your question.
Mr. Yasuno who is in charge of U.S. business, is going to respond.
Thank you very much for your question. I am in charge of U.S. business. My name is Yasuno. First, regarding the basic concept for pricing, it's as follows. Basic concept is to achieve price parity between IV and LEQEMBI IQLIK on the basis of total medical costs. IQLIK, which has been explained today, will allow patients to do the self-administration at home, which will provide convenience and also reduce the cost related to the travel as well as the burden for care partners. Also it will do away with the resources at medical institutions which will be required for IV. Therefore, these are considered to be added value. These added values are reflected on the price for IQLIK.
On the other hand, the costs related to infusion for other costs than the drug itself in terms of IV, such as infusion procedure, on a total medical cost basis, we have designed the pricing for IQLIK so that there will be no change in the copayment by the patients. Based upon these, we have come up with the pricing.
Thank you very much. 250 mg per vial, $385 per vial. Is this correct?
Yes, that is correct. About what?
Understood. For maintenance, this shall secure the possibility. An IQLIK initiation treatment, the timing of a launch the IQLIK, and at which point in time do you expect this IQLIK to start contributing to your performance? Do you think that there will be signs of a contribution in the second quarter onward or even ahead?
Thank you very much for your question.
Currently, Eisai has just been going. In the future, the convenience of Eisai will exceed the IV, so the share is exceeding that of IV in the future. In my presentation I mentioned earlier, there will be additional optionality for patients to do the home administration, introduction of a new patient will be accelerated. Also, the penetration of the BBM-based confirmatory diagnosis is going to be the key point for further penetration of Leqembi. As I've mentioned in the presentation, there will be a preparation and establishment of various foundations and platforms. Therefore, for patients to be able to receive the benefits of SC should be made easier by our efforts.
Have you started the loan selling this?
Regarding actual situation, I'd like to ask Mr. Haruna, who is in charge of U.S. global business.
My name is Haruna. I am in charge of global Leqembi business. I would like to be sure regarding the commercial. It's scheduled to be late August. From that point onward, actual drugs will be delivered to patients. Having said that, the product itself has been approved already. Prescriptions can be started based upon the discretion of medical institutions when they visit the medical institutions in the United States. I see prescriptions have started, and they are seeing increasing number of inquiries for IQLIK initiation treatment. It's gaining a lot of expectations throughout the United States from many medical institutions. That is the current status we see.
Oh, you mean that you have started to see the booking of sales?
Sales have not been recorded yet, although prescriptions have started.
The IQLIK 250 mg to be launched in the U.S., which is to come around late August. From that point onward, I believe that the sales will start to be based—
Mr. Tony Ren from Macquarie Securities, please unmute and proceed with your question.
Hi. Yeah, thank you for taking my question. My question is about your effort in the U.S. to convert patients from Eli Lilly's Kisunla which is a fixed duration therapy. I understand that you have been trying to convert Kisunla patients who stopped their fixed duration therapy, but who are also concerned about redeveloping plaques, preventing them from coming back. Can you give us some color about how that effort is going? Thank you.
Thank you for your question about the share between Leqembi and Kisunla. I understood your question to be on market share between the two drugs. First of all, IQVIA and Eisai are external data sources for market share calculation, and I would like to remind you that oftentimes these data do not cover some of the major IDNs that prescribe Leqembi. About in the patients. Recently, both drugs have about 50/50 market share. However, after the launch of initiation therapy IQLIK, as we have been discussing, we believe that the market share may change, and this may overlap with the earlier response. I would like to ask Mr. Haruna, responsible for global business to respond further?
Thank you for your question.
As I've mentioned earlier, in initiation therapy, IQLIK was granted approval, and in the U.S., doctors began to prescribe IQLIK for initiation therapy, and I feel expectations are very big. May wish to have a new, more personalized administration, but with the at-home administration with IQLIK, not only for patients but for healthcare professionals, we expect that burden will be reduced significantly. As presented in the presentation today, we've reported on the results from LEADER study, more than 80% or thereabouts of patients, the majority of the patients, 80% or so, wish to stay on treatment and are given maintenance therapy. Whether patients will discontinue or stay on the therapy, which was part of your question, as a matter of fact, majority of the patients wish to stay on the treatment and are not willing to discontinue.
Eisai is that our position, our existing position, is accepted by patients and healthcare professionals. With the introduction of highly convenient, high-quality IQLIK, we believe that we will have greater competitive advantage. We believe that as a result, our market share will further expand. Thank you for your question.
You know, if I may, I just have a quick follow-up. For the patients, for those patients who stopped Kisunla because they've reached the end of their fixed duration therapy, have you been able to convert some of them to take maintenance Leqembi?
The answer is it is possible. I would like to once again ask Mr. Haruna to address that question.
As Mr. Naito COO responded, according to the label, from IV to IQLIK conversion is possible. Similarly, patients who stopped treatment of Kisunla, it is possible to transition or convert to Leqembi. In actual clinical practice, we are seeing such conversions.
Okay, very good. Yeah, thank you very much.
Next from Tokyo Intelligence Laboratory. Please unmute yourself.
My name is Yoshida. Thank you very much. Slide number three. Mr. Yamaguchi asked a similar question. As a follow-up, on the cost of sales ratio seems to be much lower than the plan. What is the background for this better result? In your explanation earlier, the revenue was a bit larger than the expectation, and also costs were lower than the expectation. Could you please elaborate on that? Comparing the first half and the second half, first half, do you think that the loss rate decreasing by Leqembi, then it will accelerate the reduction of the loss? Do you think that the recovery rate of the cost is going to be slowing down? How do you think? Could you please give us your take on this?
Thank you very much for your question. Our CFO Oyama is going to respond.
Thank you very much for your question.
Cost operation was explained earlier in our response Leqembi and DAYVIGO, our individual products' cost of sales ratio were reduced, and LENVIMA's revenue has been very strong, including the positive impact of forex. LENVIMA's cost of sales ratio was very low. That also contributed to this better result. Regarding Leqembi, regarding your point about Leqembi, we still have the second, the third, and the fourth quarter where we expect to see further increase of the revenue for Leqembi. Towards that, we are continuing to invest the S&D expenses. Excluding the R&D expenses, we'd like to secure achievement of the commercial basis profitability. As of now, it is difficult for us to mention any trend so far. I hope you understand.
Could you please share with us, Leqembi, DAYVIGO, LENVIMA, what is the contribution ratio by among these three products?
LENVIMA is contributing the most compared to the last fiscal year. Almost the same level compared to the plan. LENVIMA revenue was larger than expectation. That was a great factor for this better result.
Thank you very much. Understood.
Moving on to the next question. Hashiguchi from Daiwa Securities, please unmute and proceed with your question.
Thank you. I'm Hashiguchi from Daiwa Securities about orexin drug discovery potential. You've made mention of this several times. You are conducting study for narcolepsy, but for other indications about research and development, you've also mentioned potential research and development outside of narcolepsy. Epilepsy indication. Regarding these indications, in that aspect, will you be pursuing these new indications or with a different compound? Will you be pursuing research and development regarding these indications? When do you expect to be able to begin clinical studies? What is the timeline that is expected at the moment?
Thank you for those questions. Dr. Ido, responsible for R&D, will respond to your question.
Thank you for your question. I'm Ido, responsible for R&D. We are considering both.
What will be our response? As you refer to in your question, there is a drug study that is covering both narcolepsy type 1 and type 2, and this study is making steady progress, and a compound profile will be clearly elucidated, and we expect a top line within this fiscal year based on the profile. Eisai, we would like to develop plans for more detailed clinical trials in this fiscal year beyond. This is a plot point, and we will also do research of biomarkers and relationship with other diseases may be indicated. What is the desired program that is also explored in exploratory research and next-generation compounds will also be considered in the research and development. I hope this answers your question.
Thank you very much. About Lerasorexan for orexin drug discovery, the history of the orexin drug discovery was presented before.
I believe that a very large number of candidates were considered, and one out of many candidates was identified, which gave me an impression that there is not much progress with regards to other compounds. There are compounds with different profiles that are being explored, and to what extent are you making progress in this exploratory research?
As you've mentioned in your question, we presented the orexin drug discovery story of the initial discovery. Out of several hundreds of thousands, we found this compound, which was Eisai. As we continued with this development, we were able to disclose information, but there are compounds with a very interesting profile. Combining that library and the biology, we are pursuing next generation orexin drug discovery.
Thank you very much.
From Bernstein Securities. Sogi, please ask your question.
Thank you very much. Regarding IV and IQLIK, I have a question about the margin possibility. What basis calculation per patient per month? IQLIK, how can I join the work of 4.5x as much IV and monthly volume of API for NIBRAC. IQLIK, I choose double because IQLIK, I use it 2x 2. So four, for one month. The other day I'd ask you the question, COGS driver is mainly by API. I assume that IQLIK can enjoy higher profitability than IV. On the other hand, IV is shrinking in mix, and that is considered to be a driver for COGS improvement. IQLIK, IV, and Leqembi— Leqembi itself as a whole is going to see better profitability going forward. Is this correct understanding?
Thank you very much for your question.
My answer may be overlapping partly with what we responded. Mr. Yasuno, who is in charge of the U.S. business, is going to respond to your question.
My name is Yasuno. I am in charge of U.S. business. Thank you for your assessment. Of course, the volume of IQLIK is increasing, and we of course expect to see a lower COGS ratio. We expect to see a better cost rate.
Thank you very much.
We would like to next take questions from the members of the media. If you have a question, please raise your hand. Yoshino-san, please unmute and proceed with your question.
Thank you for taking my question. I'm Yoshino from Nikkei. I have a question on details on page nine regarding Leqembi. Maintain top share in patients receiving treatment. What market is this anti-amyloid beta market? Maybe it is needless to mention, but could you specify market share in which market?
Thank you for your question. This is in anti-amyloid beta market, and based on claims data, this is our in-house estimate.
Thank you very much.
Any other questions from the media? If you have any, please raise your hand. Nakata-sama, can you mute yourself?
Can you hear me?
Yes, we can.
My name is Nakata from the Nikkei Newspaper. We see weaker yen. Do you see any negative impact on the profitability or earnings?
CFO Oyama is going to respond.
Thank you for your question. Thank you very much for your question. Well, with the weaker yen, what is going to be the impact on us? We have revenues— majority of our revenue is foreign currency. Currency denominated, there is an impact on the revenue by the forex. On the other hand, there are R&D expenditures and others, SG&A expenses on foreign currency. For your information, revenue year-on-year, JPY 18.9 billion was the impact of forex.
I mean, this was a positive impact by forex. When it comes to the SG&A and currency expenses considered, and the operating profit based upon the same forex, there was a JPY 1.38 billion positive impact. Out of the JPY 24.7 billion operating profit, part of which was due to forex impact, in principle, revenues and costs majority of those on foreign currency denomination, but the impact on the operating profit was limited.
Understood. Thank you very much.
Thank you. Any other questions? Eisai, if you have additional questions, please contact our support team. Thank you for joining us today.