Saya Okuzawa.
Thank you for taking time out of your busy schedule to attend Daiichi Sankyo's financial results presentation today.
Now I will explain the consolidated financial results for the second quarter of fiscal 2024, which were announced at 1:00 P.M. today based on the materials. Please refer to slide 3. This is today's agenda: consolidated financial results for the second quarter of fiscal 2024, fiscal 2024 forecast, business update, R&D update. I will follow this order. R&D update will be covered by Takeshita, our global R&D head. We will take questions at the end. Please look at slide 4. This slide shows an overview of consolidated results for the second quarter of fiscal 2024. Revenue increased by JPY 156.4 billion, or 21.5% year-on-year, to JPY 882.7 billion. Cost of sales increased by JPY 4.6 billion year-on-year. Selling, general, and administrative expenses increased by JPY 53.2 billion year-on-year, and research and development expenses increased by JPY 27.3 billion year-on-year.
As a result, core operating profit increased by JPY 71.3 billion, or 74.8% year-on-year, to JPY 166.6 billion. Operating profit, which includes one-time gains and losses, increased by JPY 91.8 billion, or 96.6% year-on-year, to JPY 186.9 billion, and the profit attributable to owners of the company increased by JPY 49.7 billion, or 51.2% year-on-year, to JPY 146.7 billion. The exchange rates were 152.62 yen to the dollar, a depreciation of 11.62 yen year-on-year, and 165.93 yen to the euro, a depreciation of 12.55 yen year-on-year. Please refer to slide number 5. From here, I will explain the factors behind the year-on-year changes. Revenue increased by JPY 156.4 billion year-on-year, and I will explain the breakdown by business unit. First, Japan business unit. Sales of Daiichi Sankyo's SPA products were no longer recorded from April 2024 due to the exclusion of the subsidiary from the HER3-Lung02 of consolidation.
On the other hand, sales of the oral anticoagulant Lixiana, anti-cancer agent Enhertu, a pain treatment Tarlige, the vaccine business, and Daiichi Sankyo Healthcare increased, and realized gains of unrealized gains of inventory assets related to Daiichi Sankyo's SPA products were recorded. All in all, resulted in an increase in revenue of JPY 13 billion. Next is overseas business unit. Here, the figures are excluding the impact of foreign exchange. In the oncology business, sales increased by JPY 52.9 billion due to growth in sales of Enhertu in the U.S. and Europe. In the American region, sales increased by JPY 1.2 billion due to an increase in sales of generic injectables, despite a decrease in sales of Venofer, a treatment for iron-deficiency anemia.
The EU specialty business saw sales increase by 22.8 billion JPY due to factors such as growth in sales of Lixiana and Nilemdo Nustendi, a treatment for hypercholesterolemia. The ASCA business, which is responsible for Asia and Latin America, saw sales increase by 13.2 billion JPY due to factors such as growth in sales of Enhertu, particularly in Brazil. AstraZeneca and US Merck upfront payment and regulatory sales milestone revenue increased by 16.3 billion JPY. This includes the recording of upfront payment from the Strategic Alliance Agreement with US Merck, concluded in October last year for three DXd ADCs, including HER3-DXd. Please note that we received the second upfront payment of $750 million for HER3-DXd from US Merck this month. From the third quarter of this fiscal year, we will record this as revenue over the expected exclusive sales period for HER3-DXd.
The overall impact of foreign exchange on revenue was an increase of JPY 39.6 billion. Slide 6 shows the factors behind the increase or decrease in core operating profit. I will explain the JPY 71.3 billion increase in profit by item. As I explained earlier, sales revenue increased by JPY 156.4 billion, including the JPY 39.6 billion increase due to the foreign exchange impact. Next, I will explain the cost of sales and expenses, excluding the impact of foreign exchange. Regarding the cost of sales, despite the increase in revenue, the cost of sales decreased by JPY 7.1 billion due to the expanded sales of in-house developed products such as Enhertu and a shift in product mix, including the absence of the sales of Daiichi Sankyo Espha, which improved the cost of sales ratio.
Selling, general, and administrative expenses increased by JPY 34.6 billion due to the factors such as an increase in the profit share with AstraZeneca related to Enhertu. Research and development expenses increased by JPY 16.6 billion due to an increase in the number of R&D personnel in line with the progress in the development of 5 DXd ADCs. The total increase in expenses due to foreign exchange effects was JPY 41 billion, and the actual increase in core operating profits, excluding foreign exchange effects, was JPY 72.6 billion. Next, on slide 7, I will explain the changes in the net income. As I explained earlier, core operating profit increased by JPY 71.3 billion, including the impact of forex.
Temporary income and expenses, due to the factors such as the recording of a gain on the transfer of Daiichi Sankyo Espha shares, there was a positive impact of JPY 20.6 billion compared to the same period of last year. Financial income and expenses had a negative impact of JPY 1.3 billion compared to the same period last year due to the deterioration of foreign exchange gain and losses. As for income tax, in addition to the increase in income before tax, due to the absence of tax-effective accounting impact associated with the decision to transfer Daiichi Sankyo Espha in the same period last year, increased by JPY 40.8 billion compared to the same period last year. As a result, income attributable to the parent company increased by JPY 29.7 billion year-on-year to JPY 146.7 billion. Next, I will talk about the forecast for the fiscal 2024.
Please refer to slide 9. For revenue, compared to the forecast announced in April, there was a decrease in sales of generic injectable at American regions and a decrease in sales due to the delay in the launch of HER3-DXd in the United States. While factoring in these, we expect the increase in sales mainly from Lixiana and Enhertu, as well as the impact of foreign exchange due to the weakening of yen. We have revised the forecast announced in April by JPY 80 billion upward to JPY 1 trillion 830 billion. Cost of sales is expected to increase by JPY 15 billion due to the upward revision of the sales revenue forecast and the increase in expenses due to the forex impact.
Regarding SG&A, despite the decrease in expenses due to the receipt of the arbitration expenses from Seagen following the finalization of the arbitration decision, expenses increased due to the impact of forex rate and also strategic investments in DX, IT expenses, and human capital. Therefore, we expect an increase of 25 billion JPY in SG&A. So while we expect an increase in R&D expenses due to the impact of foreign exchange rate, we have factored in the decrease due to the partial review of the timing of expenses, and we expect a decrease of 10 billion JPY. As a result, we have revised our forecast for core operating income and operating income upward by 50 billion JPY to 260 billion JPY and 208 billion JPY, respectively. Profit before tax will be 285 billion JPY, 50 billion JPY higher than the forecast announced in April.
Net income attributable to the parent company will be JPY 225 billion, JPY 35 billion higher than the forecast announced in April. For your reference, the exchange rate for the third quarter and beyond are assumed to be 145 JPY to the USD and 155 JPY to the EUR. The impact of yen's depreciation on April forecast is expected to be approximately JPY 37 billion increase in revenue and JPY 8 billion increase in core operating profit. From here, I will talk about the business update. Please look at slide 11. This slide shows the sales performance of Enhertu in the second quarter of fiscal 2024. Product sales increased by more than double digits year-on-year in all regions due to growth in sales of second-line treatment for HER2-positive breast cancer and post-chemotherapy HER2-low breast cancer, and sales increased by JPY 87.9 billion year-on-year to JPY 261.3 billion.
In the U.S., sales increased by 32% year-on-year to 140.1 billion JPY. We maintain the number one share of new patients in all indications for breast cancer, gastric cancer, and lung cancer. In the second-line treatment of HER2-positive breast cancer, we have a new patient share of over 50%, and we have also gained around 50% of the market for post-chemotherapy HER2-low breast cancer, and we continue to contribute to the treatment of many patients. In April of this year, we obtained approval and began promotion of Enhertu for the treatment of multiple solid tumors that are HER2-positive, and sales are steadily increasing for various types of cancer, including gynecological cancer. In Europe, sales increased by 87% year-on-year to 73.3 billion JPY.
Sales are steadily expanding, particularly in Germany, France, Italy, and Spain, and the company has secured the top position in the market with a share of more than 70% of new patients in Germany, France, and Italy, and more than 80% in Spain for the second-line treatment of HER2-positive breast cancer. In addition, the company has maintained its leading position in Germany, France, and Italy in terms of the share of new patients with post-chemotherapy HER2-low breast cancer, and it has also become newly covered by health insurance in Spain. In Japan, sales increased by 50% year-on-year to 15.5 billion JPY. We have maintained and expanded our position as the number one new patient share in all indications for breast, gastric, and lung cancer. The new patient share for second-line treatment of HER2-positive breast cancer is over 50%, and for post-chemotherapy HER2-low breast cancer is over 60%.
Thus, Enhertu is steadily progressing with the market penetration. In the ASCA region, sales increased by 80% year-on-year to 32.3 billion JPY. Sales have grown significantly, particularly in Brazil and China. In Brazil, in particular, in addition to the steady increase in new listings by private insurance, we have acquired and maintained the number one share of new patients in the second-line treatment of HER2-positive breast cancer, and prescriptions for post-chemotherapy HER2-low breast cancer are steadily increasing, driving revenue growth in the ASCA region. Please note that product sales in the ASCA region include core promotion income in China, Hong Kong, and others received from AstraZeneca, which books the sales in those countries.
We will continue to work to further penetrate the market in the regions where we sell the product and expand the number of countries and regions where it is sold, while also working to obtain new indications and deliver Enhertu to as many patients as possible who need it. Next, I'd like to talk about the alliance with US Merck regarding the development and commercialization of MK-6070. Please refer to slide 12. In August this year, we added MK-6070, which is being developed by Merck and Co. in the US, to the Strategic Alliance Agreement for the three DXd ADC products with them. We will conduct joint development, joint promotion of MK-6070 with Merck Co. in all countries except Japan. We will evaluate the combination therapy with I-DXd for small cell lung cancer and also consider combination therapy with other drugs.
The development cost will be split equally between the two countries. However, the development cost for combination therapy with the three DXD ADC products will be handled within the framework of the development cost burden of the original agreement for the Strategic Alliance with Merck & Co., which was concluded in October last year. Specifically, for each product, Merck & Co. will bear 75% of the development cost, up to $2 billion per product, and thereafter the two companies will share the development cost equally. Regarding commercialization, the two companies will jointly promote sales in regions other than Japan and will share the gross profit and promotional expenses. In addition, product sales will be recorded by Merck & Co. In Japan, Merck & Co. will sell the products independently and will receive royalties. Manufacturing and supply will be handled by Merck & Co. The consideration for this collaboration is $320 million.
In addition to the credit worth of $100 million under the original contract for the Strategic Alliance, $170 million in cash was paid to Merck and Co. as a one-time payment at the time of the contract. The consideration of $320 million, or JPY 46.5 billion, will be recorded as an expense from the time of approval of MK-6070 through the expected period of exclusivity. In addition, the amount equivalent to the credit of $150 million, or JPY 21.8 billion, which was appropriated as an alliance consideration for MK6071, is being recorded as revenue from the second quarter of this year onward over the expected exclusive period for the three DXd ADC products. This alliance supports our strategy of transforming the standard treatment for cancer patients around the world, and we will expect synergies with I-DXd and DXd ADC3 products.
On slide 13, I will talk about other initiatives in each region. In September this year, we launched the messenger RNA vaccine for the Omicron strain JN.1 of the COVID-19 vaccine Daichirona in Japan. Also, this month, we launched the FluMist nasal spray live attenuated influenza vaccine. It has been approved as a trivalent vaccine for two types of A and Yamagata type of B strains, and it is the first nasal spray seasonal influenza vaccine in Japan. We have started supplying it this season. As a Japanese pharmaceutical company, we will continue to contribute to the safety and security of the society and the health of people. Slide 14 is a meeting information. In December, we will hold a meeting to exchange opinions on sustainability. I, myself, Okuzawa, and Chief Human Resources Officer Matsumoto are scheduled to speak.
We will send out an invitation to everyone when the details have been finalized. From here, it's time for the R&D update. I will hand over to Takeshita, our Global Head of R&D.
Thank you very much, and thank you to all of you for calling in to the R&D update section. Next slide. I would like to first give you the update on the five DXd ADCs, and the agenda for the rest of the talk is listed on this slide. Next slide. First, this is a summary of the regulatory achievements that have happened in the last quarter. First of all, in the HR-positive and HER2-low or ultra-low breast cancer, this is the DESTINY-Breast06 clinical trial. We have had the final accepted in the EU.
We achieved breakthrough designation in the U.S., and we have also had the final accepted in the U.S. and priority review granted with a PDUFA date of February 2025, and also the filing has been accepted in Japan. In China, we achieved two approvals, one for HER2-positive gastric cancer and the second one for HER2-mutated non-small cell lung cancer. So these are the regulatory updates for the last quarter. Next slide. Now, I would like to go over with you some new presentations that were presented at various conferences in the last quarter. First is the Destiny Lung 03 clinical trial, and shown here is a focus on the HER2 overexpressing non-small cell lung cancer patients treated with Enhertu monotherapy. And you'll see that both response rates and duration of response and progression-free survival are quite good.
I do want to remind you that in this patient population of HER2-expressing non-small cell lung cancer, we have already achieved regulatory approval as part of our tumor-agnostic pan-tumor indication in various parts of the world. Next slide. TROPION-Lung01. This is the randomized study of Dato-DXd versus docetaxel in the relapsed refractory non-small cell lung cancer setting. And as mentioned here, we did see a clinically meaningful trend in overall survival that was recently reported. And you'll see that the difference there is 14.6 months in the Dato-DXd arm and 12.3 months in the docetaxel arm. And many of you are aware that this is an ongoing submission with the FDA for the TL01 dataset. Next slide. At the World Congress on Lung Cancer, this information was also presented by our collaborators, AstraZeneca team. This is data on what we call the QCS biomarker assay.
This is a digital pathology assay which identifies in a predictive biomarker fashion patients who are likely to benefit from Dato-DXd. And you will see here in the data that this technology is able to select out patient population that has a much better outcome compared to those patients without this particular biomarker. And you'll see this particularly on the right-hand side of the slide where you will see that the overall response rate is 36.8%, median PFS is 7.2 months with the Dato-DXd arm compared to four months median PFS with the docetaxel arm. And of course, also the patients who are negative for this predictive biomarker. We think that this is a major advance in the field of not just DXd ADCs, but a major advance in the field of oncology. And we expect that this digital pathology technology will be important in the future. Next slide.
I want to also mention that we are continuing to further study Dato-DXd in various settings in non-small cell lung cancer, including this study that's shown here in early stage non-small cell lung cancer, in which in this NeoCOAST study in which we show that in the interim results, there was an encouraging efficacy and manageable safety profile in a neoadjuvant setting. And this is really we're talking about here the arm four in which Dato-DXd was combined with Durvalumab. And you'll see here that in terms of the pathological CR rate, it was 34.1%, which is quite good with a reasonably manageable safety profile. So we're very interested in these data and really for further assessment in the clinical trial setting. Next slide. Now we're going to move on to Dato-DXd breast cancer program, TROPION-Breast01 clinical trial.
This is a study that was conducted in HR hormone receptor positive breast cancer patients in the relapse refractory setting, and as we reported, we did not retrieve a statistical significance in the final overall survival analysis, although we did see a statistically significant and clinically meaningful improvement in progression-free survival, so this dataset, TB01, has been submitted to the FDA, as I mentioned to you earlier. It is still under review, and the PDUFA date is February 2025. Okay, next slide, and in this slide, we describe yet another new study of a phase three study of Dato in the setting of early stage non-small cell lung cancer, in which the Dato is combined with the AstraZeneca bispecific drug, and this is a very important study for us in terms of yet again another attempt to demonstrate the efficacy and utility of Dato in a randomized clinical trial.
This study has started or is planned to be starting in the second half of the current fiscal year. Next slide. We're going to now move over to the HER3-DXd program. In this slide, we are reporting on HER3-Lung01 and 02 trial. Previously, you will recall that we had submitted the HL01 clinical trial dataset to the FDA as a regulatory approval application, and that we did receive back in last summer the CRL, complete response letter from the FDA due to manufacturer concerns. Let me just say that we are currently working diligently to resolve the feedback that we received as part of the CRL from the FDA as part of the HL01 clinical trial. For HL02 clinical trial, we demonstrated the statistically significant improvement in PFS, which is the primary endpoint versus standard of care.
Overall survival data at the time we presented the PFS data was immature, and we will continue to have the overall survival data mature to further assess the overall survival data. Next slide. Moving on to HER3-DXd in breast cancer. These are the results of the ICARUS breast cancer study that was presented at the ESMO meeting earlier this year. This is an investigator-sponsored clinical trial conducted at the French Cancer Institute, the Gustave Roussy Institute. And you'll see here very impressive activity of HER3-DXd in this hormone receptor positive relapse refractory breast cancer patients with a response rate of over 50% and a median progression-free survival of nine months. We are very interested in these clinical data, very impressive response data, and we're very interested, of course, in following up on these data with additional clinical trials with HER3-DXd in breast cancer. Next slide.
Now we're going to switch over to the I-DXd program. This is also formerly known as DS-7300, where the ADC is targeting the antigen called B7-H3. And at the recent World Congress on Lung Cancer, we reported the results of a dose-finding study in which two doses were studied, eight milligrams versus 12 milligrams. And based on these data, we have selected 12 milligrams as a dose for future phase three clinical trial. And at the 12 milligram dose that we were selected, the response rate is 54%. And you'll see here the median progression-free survival as well. And we are, of course, very interested and very impressed with these numbers. And we are now currently proceeding to a randomized clinical trial for this drug. Next slide. Here are some additional updates from the rest of the ADC program.
In terms of the Enhertu program, we recently initiated the clinical trial called the Destiny BTC01. This is a phase three combination study with the AstraZeneca bispecific drug for BTC, biliary tract carcinoma, in the frontline setting. For the Dato program, we recently started a TL15 phase three study as a monotherapy and in combination with Osimertinib for EGFR-mutated non-small cell lung cancer. In the HER3 program, we have initiated, or excuse me, we are preparing to initiate a clinical trial that's called the MK-1022. This is the Merck designation and therefore Merck-sponsored trial of the HER3-DXd in CRC, biliary tract cancers, and hepatocellular carcinoma. We are also doing some additional studies of HER3-DXd in non-small cell lung cancer in combination with chemotherapy and Pembrolizumab in the frontline setting.
As for I-DXd, you can see here that the phase three study in small cell lung cancer has been initiated as well as a signal-seeking phase one B2 study in the frontline setting for small cell lung cancer. We are also very interested in studying this drug, I-DXd, in the setting of not just small cell lung cancer, but non-small cell lung cancer as well. We'll be doing that in the KeyMaker U01 study for non-small cell lung cancer in the frontline setting. Okay, next slide. All right, so now we're going to move on to the next wave of our pipeline beyond the DXd ADC. First, the next slide. I'd like to report to you a compound that has a code name DS-9606. We reported on the interim data of the phase one study at ESMO of this new drug.
This is a very important drug for us because it represents the first of the next generation ADC, where the payload is no longer DXd, but the payload is something called a PBD. This is an alkylating agent. So therefore, the mechanism of action is quite different from the DXd. And here we show that we are currently doing the dose escalation trial, and we are starting to see some preliminary evidence of efficacy in terms of tumor shrinkage in germ cell tumors, GE junction tumors, and non-small cell lung cancer in a small number of patients so far. I just wanted to remind you that this is still a dose-finding phase one study. And so we are very interested in what happens to this study in the future. Next slide. You heard earlier that we are collaborating with Merck on a compound that is termed MK-6070.
This is a bispecific drug that is targeting DLL3. It's a well-known antigen expressed in small cell lung cancer. And this is very important from a strategic standpoint because, as I mentioned to you earlier, we have already obtained really very interesting, very good results with one of our DXd ADCs, the I-DXd program, the DS-7300 program. So now we have two drugs, a DXd ADC and this drug, a DLL3 bispecific drug, that we have to further develop not just as monotherapy, but as combinations in small cell lung cancer. And we believe that this combination of MK-6070 plus I-DXd could be studied eventually in the frontline setting. But for now, we are starting to do a dose-finding study in a relapse refractory setting. Next slide. Okay, finally, next slide.
I just wanted to give you a small advertisement for a science and technology day intended for our investors to give you more information about what we are doing from a science, research, and technology standpoint. The date is December 16th at 5:30 P.M. Eastern Standard Time. Also in Japan, it'll be December 17th, Japan Standard Time, and the topics we intend to cover are the latest data that's been published or presented at conferences, R&D strategy, as well as current status of our manufacturing and drug supply, so we hope to have you join us then as well. Okay, now finally, let me just go over with you the anticipated news flow for the rest of the year. You'll see that the next planned major data presentation is a San Antonio Breast Cancer Symposium. This is going to be in early December.
At that time, we will give you an update on the DB06 clinical trial and also the DB08 clinical trial. The DB06 trial is just really a longer follow-up of the clinical trial from the ASCO presentation. On the other hand, the DB08 clinical trial is a phase 1b clinical trial in a chemo-naive or post-chemo setting in patients in combination with a capecitabine or cabezavir tablet. In terms of regulatory decisions, we do expect to hear from the agencies on TL01 and TB01 sometime before the end of the fiscal year. We also expect to hear something from the Japanese agency concerning our COVID vaccine program in the pediatric patient population.
In terms of important data readouts, in the second half of fiscal year, we expect to see the top line results of DESTINY-Breast11 and in the Dato program, the TROPION-Breast02 clinical trial in triple-negative breast cancer. Okay, well, thank you very much.
ここからは皆様方からのご質問に。 Thank you very much. Now I'd like to open the floor for taking questions. 最初のご質問です。 First question is from Yamaguchi-san from Citigroup. 聞こえますでしょうか。 Can you hear me well? Yes. シティの山口と申します。
I'm Yamaguchi from Citigroup. So my first question is about HER3. HER3-DXd. In your presentation, a Merck milestone has been triggered, you said, and it's good that we can confirm the Merck milestone being triggered. But it's been four months since the complete response letter was issued. So what is the current status and what is the schedule going forward? Will there be a delay of about one year or more?
Any anticipation regarding that?
Yes, in terms of the CRL and the manufacturing issues, we are working diligently with the manufacturer as well as the agency to resolve the issues identified. And in terms of our regulatory submission plans, we are still in discussion with our Merck partners. We both remain very interested in studying the HER3-DXd in lung cancer. And once we have our regulatory plans and clinical development plans settled, we will be able to report back to you on this. Thank you. ということは。
So does that mean? 再申請が必要になるということですか? That refiling is needed because the filing status was maintained, you said previously, and CRL was issued, but still the filing status was maintained. That's what you said. But refiling, is that going to be required?
So technically, when we receive a CRL, that completes the submission process. So yes, we would need to reinitiate a new submission.
Okay. 時期はまだわかんないですね. And the timing for that, you don't know that? We are discussing the regulatory strategy with our Merck partners right now. ありがとうございます。あと二つ目. Thank you very much. My second question is about the Dato-DXd, and it's progressing with many development clinical trials. And you may not be able to comment on that, but December 20th PDUFA date, and there are some concerns being expressed by some. And you have in discussion with FDA, and what do you think about the approval potential on December 20th? And ODAC is not going to be held. But is there any updated information with regard to ODAC?
So I can't comment really on the details of the regulatory discussions that we're having with the FDA. I think we should be able to give you some updates on this in the near future, but not today.
In terms of the possibility of ODAC, it's a little bit difficult to tell you exactly what the FDA is thinking because we're not the FDA. But as a general statement, the FDA can request ODAC at any time prior to the PDUFA date on any submission, not just the one that we're talking about today. わかりました。最後にEnhertuの売上。
Thank you. And your sales for Enhertu has been revised upwards. And on the local currency basis, I think in Europe, I think it's revised downward a little bit from the first quarter and onwards. And then in the US, it's revised upward. But quarter on quarter, I think the growth is a little bit slowing. But then I think the indication penetration is very rapid. So it's just a temporary slowdown. And once the indication is expanded, you can pick up with the growth momentum once again. Am I correct?
小川の方から回答いたします. Ogawa would like to answer that question. In Europe, Enhertu, compared to the original plan, what's different is the timing of insurance reimbursement in some countries. There has been a delay of reimbursement in some countries, including Spain and the U.K., and that is impacting our sales performance, and because of this, we have updated the number for Europe. As for the U.S., as you have rightly pointed out, HER2 positive and HER2 low indications both are penetrating the market in a very nice way with over 50% market share for both, and also pan tumor indications are expanding their prescriptions as well. For the remainder of this fiscal year, DB06 guideline listing. Oftentimes you ask this question, and this is something that we don't know the timing for, and that is our assumption.
But on the other hand, PDUFA date is February 1st of 2025, and that's been fixed. And based on this assumption, we have revised the numbers in the U.S. for Enhertu.
Thank you. So another question about Europe. You mentioned Spain and the U.K., and it's a low HER2 reimbursement or the second line? It's HER2 low for HER2 low. Okay, understood. And for the U.S., PDUFA date is February 1st, and then you have come up with this forecast based on that assumption that you will be able to get an approval on that PDUFA date.
Yes, that is our assumption for the forecast update. Thank you very much. Well understood. 次のご質問です。
So next question. 八口様、よろしくお願いします。 Mr. Hashiguchi from Daiwa Securities, please ask a question. Thank you. 八口です。よろしくお願いします。
This is Hashiguchi. Hello. My first question is about TB01 study of Dato-DXd in OS analysis.
Statistical significance was not demonstrated as you have presented in your presentation. What about the numerical result? What were the trends? So I'd like to know about these. Based on the results of other studies, when statistical significance was not obtained, you always explained there was a certain tendency of the efficacy, or you mentioned the numerical value, but you didn't touch upon that. So in terms of the number or the trend in both terms, the results were not satisfactory or not to meet your expectation. Would that be the case?
Yes, so we haven't published or presented the overall survival data yet. So I hope that you will be able to wait until we can show you the data at an upcoming conference.
But we are in discussion with the agencies on what we are seeing so far in terms of what was an interim analysis, and we need to really see what the final OS data looks like. So it's a little bit premature to comment on exactly how we, and especially how the FDA views our data so far.
San Antonio Breast Cancer Symposium announcement. So you are planning to present the data in San Antonio Breast Cancer Symposium, which does not include this data. But it's planning to announce it before January PDUFA date.
I think currently the plan would be likely to be a no to your answer. Yes, thank you very much.
Okay, thank you very much. One other thing is for the HER3-DXd collaboration with Merck. One year ago, at the time of the contract execution, Merck.
上長を踏まえて. Based on the one-year status of progress, we'll make a decision whether to pay an upfront payment to the rest of the upfront payment. I think that was the structure of the agreement. Now that $750 million will be paid, what was the background from your perspective, from your understanding? So EGFR positive, non-small cell lung cancer. When we consider the marketability of this, was more confident than you had expected, or the potential for the type of cancer, you have a higher expectation? So I'd like to know how you interpreted this change in the position of the decision of Merck. Okay.
So I'm going to be in part speculating on what they are thinking. I believe that they remain highly interested in this HER3 asset, that there's a lot of value in this particular asset.
I just wanted to remind you that just in lung cancer, the majority of patients with lung cancer express HER3. I think the numbers are in the literature, something like 70%-80%. So there's a lot to be done in the field of lung cancer alone. And as you're probably aware, HER3 is expressed widely in many other cancers besides lung cancer. So there's a lot for us to be doing in this partnership. And that is, I think, the reason why Merck remains highly interested as we are in this particular asset. ありがとうございます。以上です。
Thank you very much. 次のご質問です。 Next question from J.P. Morgan, Wakao-san, please. ありがとうございます。
Thank you. I'm Wakao from J.P. Morgan. 一つ目がEnhertu。 My first question is about Enhertu. 今期の計画。 Your forecast for this fiscal year and how it's going to be affected.
NCCN guideline listing, I think it's kind of coming quite late, later than expected. So if you can get an approval before the listing on NCCN, but the listing of NCCN is probably not needed for you to achieve this fiscal year's forecast as long as you get an approval. Or do you still believe that the NCCN guideline listing is needed before the approval to achieve the forecast?
Ogawa would like to answer your question. Thank you for that.
NCCN guideline, I think, is considered to be a very, very important event for us. PDUFA timing is now clear. Therefore, as of now, your forecast is very much based on PDUFA date rather than NCCN guidelines. So whether NCCN guideline listing comes before and after, it wouldn't really affect our potential to achieve our forecast.
Thank you.
The second question, and this is something to do with what Yamaguchi-san asked. It's about HER3-DXd filing and also approval. So in my understanding, the manufacturing issue is there and also a regulatory issue or a negotiation is ongoing right now. And as for this manufacturing issue, do you still have a clear way forward to resolve this manufacturing issue? And you said refiling is needed. Hasn't a Lung02 success? Is it affecting that situation? So I think you thought that you could get an approval without the refiling. So I don't know what changed in terms of the regulatory negotiation.
So I think in terms of the CMC manufacturing issues, we are continuing to work on them. And I think we've made a substantial amount of progress in resolving those issues.
In terms of our regulatory strategy for HER3-Lung01 plus I-Lung02, as I mentioned to you earlier, we are still having those discussions internally with our Merck partners as well as with the FDA regulators. So we're not quite yet ready to give you what our plans are going to be with these two clinical trials yet.
And for I-Lung02. Has the HER3-Lung01 study succeeded? Is it affecting your regulatory strategy or not? In a previous submission, we had for the FDA was HER3-Lung01. But certainly, in a future submission, now that we have the I-Lung02, the agencies will certainly be interested in looking at the comprehensive data set available on this patient population. ありがとうございます。
Thank you very much. My last question is I-DXd and HER3-DXd, Keymaker sub-study pembrolizumab combination are now included under the umbrella study by Merck.
If you can obtain positive data out of these two subsets, I don't know which stage, but NSCLC, non-small cell lung cancer, first line indication is something that you'd like to get. HER3 is expressed in lung cancer, as Takeshita-san explained. I-DXd, SCLC efficacy has been confirmed already. Do you believe that in non-small cell lung cancer, with a rational background understanding, you can move ahead with non-small cell lung cancer as well?
With Merck, we are very interested in having multiple shots on goal. We have a couple of DXd ADCs that were the target expressed in certain types of non-small cell lung cancer. This is a reason why we are going straight into the frontline setting with two of these assets. I think your question about why are we doing this with the I-DXd, I think that was your question.
In earlier clinical trials that were reported already, we did see activity of I-DXd in lung cancer types other than small cell lung cancer. So we are very, very interested in following up on that data to see whether or not there is value in studying I-DXd in non-small cell lung cancer. はい。 わかりました。ありがとうございます。 I see. Thank you very much. That's all from me. 次のご質問です。
So next question, please. モルガンスタンレーMUFG証券村岡様、よろしくお願いします。 Mr. Muraoka from Morgan Stanley MUFG Securities, please ask your question. こんにちは。 Hello. 村岡です。
I'm Muraoka from Morgan Stanley MUFG Securities. いろいろ重要な話はいろいろ出終わったような気がするんですが。 So I think all the important questions have been already asked. However. 数字の細かなところなんですが。 I'd like to ask some detailed numbers. The data book in the first pages. The breakdown of the changes of PL for SG&A. 実績、ADC支払い以外の。 So other than the payment of ADC. 実績の加味金2251。 So 222, 2,251. Although the actual was not changed, however, the changes made was 4,900.
Yes, there was a certain increase before, but when I look at the number, so for the second half, you are planning to use the 4,900, which is a plus of 2,600 and 2,700. So I just wonder the calculation, how should I interpret this revision?
This is Ogawa. Ogawa would like to answer to the question. Thank you very much for pointing out. So as a general trend, I think as you already understand, for the second half, the expenses tended to become larger. That's the trend of our company, for sure. For SG&A, the major factor of the increase is as you mentioned. So long-term incentive in the United States, just for one, yes. And also the expenses to build the systems and organization to support oncology business, and also DXIT investment for that.
グローバル人事制度, and also the investment in the global HR system, so that is to invest our human capital. 現在の, so those are the areas. というのを我々としては, we expect the increase in expenses. 季節的なずれと言いますか, so there's an up phasing aspect in terms of the timing of recognizing the expenses. 予見性と言いますか, so we like to improve the productivity. 精度を高めて, so we like to make more precise predictions about the occurrence of the expenses. 考えておりますが, できるところでは, and we will continue our effort. However, the reasons I have just said are behind the fact of the revision.
Thank you very much, so other than the profit share of 4,900, 上げる可能性は高いと思っておいた方が, it's likely to be used up by those factors you mentioned, while still may have some unused expenses in the end. Well, 正確な, so we like to be precise in terms of the forecast always, but even so.
必ずしも100%毎回毎回という. So we're not able to use it up every time 100% when we look at our records, but we would like to improve our precision, and we like to use the expenses in a planned manner to the plan. Okay, thank you very much. And one other question is that, so in this year's plan, will receive the approval in December, January, and based on that, the sales expectation is JPY 5 billion or so. However, if your expectations were not satisfactory, the approval was not given, in that case, what would happen for the sales expectations? Even if you cannot launch those products by the end of this fiscal year, still you can maintain this forecast. Okay, thank you very much for that question.
So in our assumption, I think we will be able to absorb even approvals at the given, but to.
入れております。 So that assumption has been already factored in. However, we would like to minimize the impact and would like to absorb should such things occur. 予算の件で、日本の売上で。 First budget. 予算倍増しているんですが、多分ジェネリックが出なかったという。 The effect to double would be because in terms of the sales forecast, because of the absence of generics. So do you expect generic will not be launched for the time being, or you just got lucky for this fiscal time because the generic was not launched? Okay, thank you very much for that question. So we had been assuming the entry of generics. So with the absence of that, that was a big upside. But currently, we are assuming generic will come sometime after 2025, but we do not have any precise prediction for that. ありがとうございます。 Thank you very much. That's all from me. Thank you. 次のご質問です。
Next question. From UBS Haruta-san, please. UBS証券ハルタです。 Haruta from UBS.
Can you hear me? Yes. Sumimasen, TROPION-Breast. TROPION-Breast01 is my question. OS statistical significance has not been achieved. One of the reasons is in the chemotherapy arm after no response in HER2 or other ADCs were used, and that may have affected the result of OS. Can you elaborate on that? To iu. And if TROPION-Breast01 is to be approved, then for HER2-low patient population, DB04, there may be overlap between the two. So in the real world, ultra-low and HER2-negative are the populations where this indication will be used.
Yes. Yes. In the clinical trial, we did not restrict how to treat patients in the control arm when they relapsed in the clinical trial. So it is very certainly possible that these patients had access to Enhertu and possibly other ADCs.
We are very interested in that analysis, and we should be able to share the results of that to you at some upcoming conference. Now, in terms of the overlap in the patient populations between TROPION and Enhertu program, and I think your question was how to make that distinction in the same patient population. I think ultimately, it's going to be up to the physician to determine, based on the clinical data available, which one is the best one for the patient. It will be important for us to be able to provide as much information as possible to the prescribing physician so that they can make that selection. 承知しました。あとはその。
Understood. Thank you. What about the sequential usage? Is that your assumption, right?
Yes. In theory, that is a possibility.
To support that idea from a physician's perspective, they are going to want to understand the clinical data. We are working on generating the clinical data to answer that question about the sequencing. わかりました。ありがとうございます。
Understood. Thank you. My second question is ADC development biomarkers. 患者により効くのかっていうことの。 To select the patients who can benefit the most. Biomarkers are very important in any development of ADC. For Dato-DXd, TROP2 positivity, and of course for TROP2 IHC, which is a conventional means, it is very difficult to measure TROP2. Therefore, it has taken time to develop another biomarker. For B7-H3 or Cadherin-6 for any ADCs other than TROP2, which patients can benefit most, it is very important to develop biomarkers to understand that. What is your idea of development of biomarkers? Question.
I absolutely completely agree with your assessment that biomarker development, and especially this digital pathology technology, is going to be very important for our ADC program. We can see that already with the AstraZeneca program, the digital pathology technology has been extremely helpful in identifying patients who can benefit greatly from Dato-DXd ADC. And so that same principle applies to other ADCs that we have, not just in the AstraZeneca program, but also in the Merck program. And I hope I think you're probably aware now that you can sort of imagine the future, a situation where a physician, the prescribing physician, sends off a lung cancer biopsy for digital pathology analysis. And based on, let's assume that there's a lot of progress in the digital pathology data, not just for Dato-DXd, but other ADCs.
You can kind of imagine now that with a digital pathology technology, that might be a way for a physician to know which ADC will this patient benefit from the greatest. That's a very realistic possibility as a future application of our digital pathology technology. わかりました。ありがとうございます。
Understood. Thank you very much. 次のご質問です。
Next question. SMBC Nikko Securities Wada様。 Mr. Wada from SMBC Nikko Securities, please ask your question. SMBC Nikko Securities Wadaです。
I'm Wada from SMBC Nikko Securities. Can you hear me? Yes. 私もADCの作用基準について。 So I have a question regarding the mechanism of action of ADC. First, biomarker of Dato-DXd. That's the first question. So for HER2 or Enhertu, so primarily 20% HER2 was the initial target, but now expression became lower, low or negative. So now response range expanded. But when we look at Dato-DXd in lung and non-small cell lung cancer, like TROP2 expression is like 60% coverage.
When it can cover the ultra low, probably you do not need to select the patients who are likely to respond to this. So having said that, what is the difference in terms of background or the pathological difference between lung and breast cancer? That's my first question.
Yes. Okay. So let me answer that question first. The differences that we are seeing now in the biomarker component of our ADC program with Enhertu versus the Dato. The fact that with Enhertu, all we had to do was use IHC and go for the low HER2 low and ultra low, that seemed very simple. Whereas in the Dato program, the TROP2 antigen, we did not see much correlation with IHC, but we can finally see this now with the digital pathology technology. That difference, we believe, reflects a difference in the biology of the target now.
Particularly in a TROP2 program, when we do the digital pathology technology, what we are really looking at is not just expression of that antigen on the cell surface membrane, but also the amount of internalization of the antigen into the cytoplasm. The digital pathology is detecting not just the cell membrane staining, but also cytoplasmic staining. You can see that the digital pathology takes into account how the biology and intracellular processing of these cell surface proteins. It is certainly very possible that we are going to be looking at something very similar for the other antigens that we are looking at here, the HER3 or B7-H3, etc. It is an emerging field, a very exciting science to be studied using digital pathology. ありがとうございます。あともう一個。
Okay, thank you very much.
One other question is that I'd like to know about the synergy effect of MK-6070 additional compound in your partnership with Merck. And so Merck already going on the clinical study with the Keytruda, and by blocking the PD-L1 pathway, synergy seems to be affected with that combination, but the combination with I-DXd, what would be the synergy you can think of? So engaged T cells may be more activated by that. So I'd like to know so far what you have understood that. And I think your thinking is correct.
And here is the biology that we are imagining, which is that the I-DXd causes tumor cell death and release of tumor antigens, neoantigens. And in some ways, it results in an immune response, which can be potentiated or increased by drugs such as the MK-6070 bispecific drug or even Keytruda. So that is our current working hypothesis.
We believe that this hypothesis is correct based on our experience in combining DXd ADCs with immuno-oncology drugs such as PD-1 agents. A combination of a PD-1 plus a DXd ADC appears to show synergy in terms of efficacy in both animal models as well as in clinical trial setting. Thank you. ありがとうございます。
Okay, thank you very much. 次のご質問です。
Next question. BofA Securities Mamegano-san. おはようございます。BofA Securitiesのマメガノでございます。
I am Mamegano from BofA. Can you hear me? Yes. 私から1点確認させていただきたいんですけど。 I want to clarify one thing. R-DXd. クリニカルトライアルドットコム見ますと。 If you look at clinicaltrials.gov, I think recruitment has been completed already. Starting from February of this year, I think you started this clinical trial and the recruitment completed very rapidly. Was it faster than your expectation? It's my understanding, correct? And if that is the case, do you think the top line results will be obtained earlier also?
I think you're referring to the ovarian cancer clinical trial. Is that correct? そうですね。 Yes, yes, that is correct. Ovarian cancer, yes.
So that particular ovarian cancer clinical trial is ahead of schedule. And so we do anticipate that we will see some interim analysis data ahead of schedule. ありがとうございます。
Thank you very much. 次のご質問です。
Next question. Mr. Sugi from Bernstein. ありがとうございます。
Okay, thank you very much. いくつか質問があります。 I have several questions. First, 今回のHER3-DXdとのコラボレーションの継続について。 So collaboration continuation on HER3-DXd with Merck, when I calculate more precisely, そう、Allocation seems to be made in over eight years. So until LOE of HER3-DXd, it will become seven years after, eight years after, is that the assumption? はい、小川の方から回答いたします。はい、あの。 Ogawa will answer to that question. の方でそのように。
Yes, based on the calculation. いただいているかと思います。 I think that's the assumption.
では。 But for us, during the exclusive period, 会議はしておりませんで。 We are thinking, however, that period is not disclosed, so we cannot answer to your question precisely, but the assumption is made on that assumption. That's correct.
Thank you very much. In your revision, the sales of Enhertu increased. However, profit share with AstraZeneca decreased. Could you tell us the background to this? はい、アストラゼネカとの。
Profit share with AstraZeneca concerned? 下げている部分というか、一番大きいのは。 The big factor is. 特に欧州でのEnhertuの元々のタイミング、想定していた。 So assumed timing. の遅れ、先ほどちょっと。 Of the reimbursement in Europe, which has been delayed, as I said in the presentation, and factor in that the downward revision was made. というふうになります。 So that's the reason for the downward revision.
Okay, thank you very much. So next question is for Takeshita-san about DS-9606.
So we understand this is a new ADC platform, and so it has a different payload as well as the cleavable linker that you have actually disclosed previously. So it almost looks like, so Claudin-6, what we understand is it's not expressed on the cancer cells, but rather it's expressed in the junctions of multiple cancer cells. And so for this type of the ADC with a cleavable linker, is it to target this type of non-on cancer cell, the antigen? So that now you have two types of ADC. One can target the antigen on the cancer cells, while this new one that can target the antigen that are present in the proximity or the tumor microenvironment of cancers. Is it the kind of the rationale of your drug development?
So the design of this ADC, yeah, so the linker is a little bit different, as you mentioned.
And also the target, Claudin-6, it's a component of a tight junction between cells, but mostly in tumor cells and not in normal cells. And that's where the selectivity of the drug is also derived from. So yes, it's a very different way to think about the ADCs compared to our DXd ADC program. But we are very excited from a scientific standpoint based on the preclinical data we have seen so far and also the limited amount of clinical trial data that we have. Oh, thank you. No, that's actually very helpful to understand. So does that mean that Claudin-6 is not expressed outside of the cancer cell? You said that it's expressed inside the cancer cell. No, it's expressed outside of the cancer cell. So there are, so cancer cells tend to stick to each other.
And this particular protein is part of the junction between the tumor cells. So these are on the outside of the cells and not inside.
Great. Thank you very much for the clarification. Thank you.
The next question is from Michael Nedelcovic from TD Cowen. Please go ahead.
Hi, thank you for the questions. I have three, if you'll allow me. My first relates to positioning of your ADC portfolio, similar to a previous question, but this time in EGFR mutant non-small cell lung cancer. Both Dato-DXd and HER3-DXd have shown compelling data in EGFR mutant non-small cell lung cancer. So how do you plan to position these two agents in this indication? Are you considering combination or sequencing? And to the extent that sequencing of the two drugs might be pursued, do you worry about cross-resistance given that they share a payload?
So first of all, your last question about sequencing, that is still a question that is not fully explored. So I can't give you a definite yes or no answer on how we deal with sequencing until we have some clinical trial data to look at. And in terms of how we view our strategy of our DXd ADCs in the EGFR-mutated lung cancer patient population, I think it's ultimately going to be how strong is the data with each of these assets. At the moment, neither one of them are approved in EGFR-mutated lung cancer patients, but we will try very hard to generate enough data so that certainly the regulatory agencies, but also the prescribing physician can decide which is the best one for you to use in a particular patient.
Thank you. My second question relates once again to the PBD platform.
Can you elaborate on the rationale for building out this ADC platform? DXd has proven itself to be a powerful warhead, and there are, of course, more tumor-associated antigens that could be pursued. So is this simply diversifying the pipeline and leaving no stone unturned, or are there specific reasons why you chose to pursue a PBD-based payload?
So an important consideration of PBD is that it's a very different drug than DXd deruxtecan. DXd target is an enzyme called topoisomerase. It's a DNA-binding enzyme. So it's involved in DNA metabolism. PBD is an alkylating agent. So it's a drug that puts alkyl groups on many, many things in the cell, including various proteins. So it's not specifically a DNA metabolic drug, but a protein alkylating drug. And so you can see that the mechanism of action is very different.
So we do anticipate that it will have very different clinical properties from the DXd ADCs simply because the payload is different.
Understood. Thank you. My last question is once again on the Dato-DXd TROPION-Lung01 filing. You mentioned that FDA could convene an ODAC anytime prior to the PDUFA. If the FDA does choose to convene an ODAC, would you consider that a positive development because it would mean the agency is strongly considering the application, or would you take it as a negative development because it would mean the agency has potential concerns about the application?
Well, you know, it's very difficult to read the minds of the FDA regulators. So I'm not going to be able to answer your question in a firm yes or no on this.
A lot of times when an FDA convenes an ODAC, they have a specific question that's directed at the ODAC committee members. That's probably going to tell us, you know, or what is the FDA thinking about, or what are they worried about. But as I said, we're not quite there yet. I think we just have to sit down and wait about the ODAC question.
Understood. Thank you so much for your time.
The last question is from Tony Ren from Macquarie. Please go ahead.
Hi there. Yeah, thank you for taking my question. My last question is on your partnership with Merck, the DLL3 bispecific, Merck MK-6070. Last week at the ENA 2024 triple meeting, we saw Chinese biotech Zai Lab, and they have a licensed drug from MediLink, ZL-1310, demonstrated very high response rates of 74% in DLL3 selected small cell lung cancer patients.
Obviously, some of that response rate is unconfirmed. So I see that in your study with Merck, you guys are also exploring a DLL3 enrichment strategy. So I just want to get a sense from you, what is your current thinking on the DLL3 biomarkers? Are you guys using, for example, IHC versus NGS? Any thinking in terms of any threshold? Because my belief is that the DLL3 is also nearly ubiquitously expressed on small cell lung cancer. So that's my first question on the DLL3 combinatorial strategy with the Merck Harpoon asset. The next question is on AstraZeneca's China news. You guys probably heard that their China head is under investigation in China. So just curious, you guys mentioned that for Enhertu revenue, it's doing very well in China. I just want to get a sense out of the ASCA revenue, what percentage is from China?
Yeah, thank you. Okay, I will answer the biomarker question. So it's a bit early in our DLL3 program to tell you what is our biomarker strategy. But certainly in modern oncology drug development, exploration of predictive biomarkers to be used in clinical trials and possibly in the setting of a regulatory filing to select a specific patient population for a cancer indication. I think that's very much on the minds of all of us here. So yes, we will be exploring biomarkers, and we may or may not eventually have to use the predictive biomarker strategy for our DLL3 bispecific.
So regarding the ASK business, in the China business, it's almost, I would say, 40%, a little less than 40% of our ASK business at the moment overall. And HER2, for us, it's our core promotion revenue we receive. So it's not really the net sales.
But that's the impact on the revenue at the moment.
Okay, so for Enhertu in China, you guys receive co-promotion revenue from AstraZeneca.
That's correct. Okay, yeah, perfect.
Okay, that's it for me. Yeah, thank you. それでは予定の終了時刻となりましたので、投資家アナリストの皆さん、次は。
So it's already time to conclude this meeting. So this concludes our Q&A session with investors and analysts. Thank you very much for your attendance.