My name is Sunao Manabe. Thank you very much for participation in this set of management presentation of Daiichi Sankyo's biopharma business schedule. Thank you very much indeed. At 1:00 P.M. today, we have made announcement of the consolidated results of the fiscal year 2017, and I am going to make a presentation based on the handouts today. This is the contents today. The consolidated performance of the fiscal year 2017 and progress of the fourth medium-term business plans, and the forecast of the performance in FY 2018. After that, we will take questions from the floor. First of all, I would like to start with the consolidated business performance. This is the overview. The revenue was JPY 960.2 billion. The JPY 5.1 billion increase from last year, or 0.5% increase of the revenue. Cost of sales reduced by JPY 3.4 billion from last year.
SG&A expenses, JPY 600 million reduction, and R&D expenses will be explained later on. But it increased by JPY 21.7 billion, including the special items. As a result, operating profit was at JPY 76.3 billion, reduction by JPY 12.6 billion from same time last year. Profit decline by 14.2%, and profit before tax reduced by JPY 6.8 billion from last year, JPY 81 billion. The profit attributable to the owners of the company was JPY 60.3 billion, a JPY 6.8 billion increase or a JPY 12.7 billion increase of the profit. The Forex actually was JPY 110.86 per dollar, JPY 2.44 depreciation, and JPY 129.7 per euro. That is a yen depreciation by JPY 10.86. Now I'd like to give you the factors of ups and downs of the performance from last year. Revenue increased by JPY 5.1 billion from last year.
I'd like to give you the breakdown of the main business unit in the following. Starting with the domestic pharma, vaccine, and OTC in Japan. The Olmetec hypertension product had a reduction of the profit revenue. But Lixiana, the antiplatelet, made a good growth, and Inavir, the anti-influenza viruses. Also, PRALIA, osteoporosis with the new indication of RA, made a good expansion of the sales. The Daiichi Sankyo Espha, mainly the authorized generics such as azacitidine, olmesartan, and rosuvastatin, they made a significant growth of the revenue. In Japan as a whole, we had an increase of the sales by JPY 38.5 billion. Next, overseas, excluding the impact by the Forex. The DSI, Daiichi Sankyo, Inc. in the U.S., they have olmesartan, hypertension, and Welchol, type 2 diabetes and hypercholesterolemia treatment drugs, and Effient, antiplatelet agents.
Those had a reduction of the revenue, and they had a significant reduction of the revenue by JPY 69.2 billion. Injectafer injectable iron deficiency anemia and generics IV. Those increased the sales by JPY 15 billion. Daiichi Sankyo Europe had a decline of the revenue of olmesartan. However, Lixiana made a good growth with a JPY 1.8 billion increase of the revenue. ASCA in Asia and Central South America, they had an increase of the revenue by JPY 5 billion. Due to Forex, we had an increased revenue by JPY 14 billion as a whole. This is the operating profit ups and down and its factors behind. Revenue, as I said earlier, had incremental sales up by JPY 14 billion due to Forex impact, and we have the increase of JPY 5.1 billion all together. We have expenses, excluding the Forex and the special items.
Cost of goods had increased by JPY 18.6 billion due to the cost rate increase and Olmetec patent expiry. SG&A increased by JPY 0.7 billion, excuse me. R&D expenses reduced by JPY 6.9 billion due to the mirogabalin trials over. Cost increased by JPY 12.1 billion due to Forex. That includes JPY 3.3 billion cost of goods and SG&A, JPY 5.9 billion, and R&D, JPY 2.9 billion. Special items have reduced. For the special items, we have a reduction of the cost by JPY 6.8 billion from last year. Excluding those Forex and the special items, we had a decline of the profit by JPY 21.3 billion. This is the details of the special items. In the last fiscal year, we put up the impairment losses for vaccine and restructuring in Europe. We had a cost increase by JPY 40.4 billion.
This year, we made sales of the tangible fixed asset, which reduced the cost by JPY 6.1 billion. However, we had intangible asset impairment for CL-108, and we put up the restructuring cost in the U.S., which put up the expenses by JPY 33.6 billion. We have a reduction of the expenses by JPY 6.8 billion from last year. This is the profit attributable to the owners of the company. Operating profit, including the Forex and the special items, were declined by JPY 12.6 billion. Financial income and expenses, we had a JPY 5.9 billion reduction of the expenses due to the Forex gain and loss impairment due to yen depreciation, and we have income tax as well. In 2016, we had an impairment by vaccinations, with the tax effect not applied to some of the cost, which pushed down the tax rate.
However, in 2017, due to the U.S. tax rate reduction, we had a tax rate reduced, and then we had a reduction of the 19.1% of the corporate taxes. For non-controlling interest, for 2016, we had current losses of KDSV quite big, but we have Kitasato Institute non-controlling interest being for the contribution side. Therefore, 2017, KDSV profit and loss improved and profit reduced by JPY 5.5 billion. Profit attributable to the owners of the company was JPY 60.3 billion. That is increased from by JPY 6.8 billion last year. This is the yen basis ups and down of the sales, including the impact by the Forex. Patent cliff impact by Olmetec, DSI, the U.S., had a significant reduction of the revenue. In other business unit, they had increased revenue as compared to the last year. This is the main product revenues in Japan.
Lixiana made a significant growth of the sales. Inavir also made a solid growth of the sales. Nexium, due to the special expansion repricing effect, they were hesitant of purchasing the product. Also Memary grew most stagnantly now. That was only a slight increase for the Memary. Long-lasting products, we have quite a few of them struggling today as compared to last year. This is the progress of the fourth midterm business plan. These are the agenda for this section. Let's start with the edoxaban. This is the revenue of the edoxaban and target of our midterm business plan for 2020. Since its launch, edoxaban has been making the solid expansion of the sales in Japan, Europe, and Asia. The target for the midterm is a JPY 120 billion revenue by 2020, and 2018 target is JPY 105 billion globally.
This is the DOAC market situation, the global market situation, including edoxaban. The bar graph shows the transition of the annual sales of the DOACs. The line graph shows the DOAC ratio out of the warfarin and DOAC together. That shows the progress of the switches from the warfarin to DOAC. The DOAC market size has been on the expansion trend in the last five years, and the cumulative sales up until December 2017 was reaching nearly JPY 2 trillion. Line graph shows the switches from warfarin to DOAC. That is making steady progress together with the market expansion, now reaching 40%. This shows the DOAC market in Japan and Germany, which is the two leading sales countries. Likewise, in the global market, in those two countries, the market size is growing steadily.
I'd like to now talk about the quarterly sales transitions of our Japanese DOAC market. In the last one year, the Lixiana share grew steadily, and it is narrowing the gap to the top two products. In 2018, we are aiming to get the number 2 market share.
This slide shows Lixiana's new patient prescription share here in Japan. Lixiana has kept number one new patient shares since March 2017, and its share exceeds 40% as of March 2018. By maintaining number one share in new patient, Lixiana will be in good position to achieve number one share in terms of revenue as well. This slide shows the situation of Lixiana in two markets, Germany, the largest European DOAC market, and South Korea, in which the brand share is increasing rapidly. Lixiana revenue share is simply expanding month-on-month basis in both of these markets. As of January 2018, the share has reached 10.5% in Germany and 23.1% in South Korea. In South Korea, just like in Japan, Lixiana is catching up very closely to number 2 brand. This slide presents Lixiana's share in other countries, in addition to Japan, Germany, and South Korea.
In Europe, we see steady growth of Lixiana in Germany, Belgium, Italy, and Spain. In Asia, it is doing very well in South Korea and Taiwan. This is now how Daiichi Sankyo envisages growth of edoxaban as blockbuster assets. Expansion of number of markets or countries we launch in LCM, the life cycle management, will be key for growth. Edoxaban is already launched and approved in more than 20 countries, covering approximately 95% of global market potentials. In 2017, edoxaban was launched in six additional countries, including Portugal, and approved in three additional countries, including Brazil. Many clinical studies and clinical researchers are ongoing as we seek to maximize brand value. We have established a new brand mark for edoxaban clinical research program, encompassing so many edoxaban-related studies called EDOSURE.
In 2017, we launched LIXIANA OD tablets in Japan, which is the first OD tablet DOAC in Japan. This is the EDOSURE brand image. First of all, the name EDOSURE is coined from two words, edoxaban and assurance. By generating evidence through life cycle management of edoxaban, the EDOSURE, the program brand mark represents Daiichi Sankyo's commitment to deliver further assurance to patients and doctors about anticoagulation therapy using edoxaban. We hope to leverage this brand mark to enhance the brand's image of the product as we pursue our effort to maximize value of the product. This is a list of main ongoing randomized control trials with edoxaban. In 2017, ENSURE-AF study results led to update of summary of SmPC in Europe regarding method of administration in patients with non-valvular atrial fibrillation undergoing cardioversions.
In Hokusai-VTE cancer study, edoxaban became the first DOAC to demonstrate non-inferiority to standard of care in EU and U.S., DOAC tapering. The presentation of the study result was given in ASH 2017. As for the clinical researchers, in 2017, patient enrollment progressed smoothly in two studies, ETNA-AF and ANAFEE. ETNA-AF is real-world surveillance of edoxaban treatment in routine clinical practice in atrial fibrillation, and ANAFEE is an observational study in 75 years or older atrial fibrillation patients in Japan. We plan to disclose baseline data of these two studies in fiscal year 2018. We'd like to show you the Japan business. This slide indicates the midterm business plan target and our progress. The target is to grow sales of six key products, excluding Lixiana, to JPY 243 billion by 2020. In fiscal year 2017, the sales has increased versus the previous year to JPY 212.8 billion.
In fiscal year 2018, we project this figure to maintain at the same level at JPY 212 billion. Some factors that changed from our original assumptions were Nexium's repricing due to sales expansion and slowing down of Memary's growth and delaying obtaining Effient's additional indication in brain. After fiscal year 2019, we will continue our effort to put this back on expected growth track with an aim to meet the midterm business plan target. In fiscal year 2019, we have steadily executed on the cycle for sustainable growth. As part of our effort to continuously launch our original products, we filed submission for mirogabalin and esaxerenone and obtained approval for additional indication of PRALIA and launched Narurapid and NARUSAS.
In fiscal year 2016, Daiichi Sankyo was ranked number 1 sales revenue in Japanese ethical pharmaceutical market, and for 6 consecutive years, our MR was ranked number 1 in INTAGE surveys. With our in-licensed products, we launched additional indication with TENELIA as well as CANALIA combination Tablet. As for mirogabalin, based on two phase III studies in post-herpetic neuralgia and diabetic peripheral neuropathic pain, we filed submission for treatment in peripheral neuropathic pain in February in Japan. As for esaxerenone, based on Japanese phase III study, in February, we filed an NDA submission for treatment of hypertension. As of 1:00 P.M. today, we have released our financial results. Alongside with that, we have announced that Daiichi Sankyo will reorganize the Kitasato Daiichi Sankyo Vaccine, a subsidiary specializing in manufacturing starting from April 2019, and we plan to name the company Daiichi Sankyo Biotech.
This new structure will enable Daiichi Sankyo to ensure stable supply of vaccine and also to enhance manufacturing capabilities of biologics as well by building on the KDSV's know-how nurtured through its experience with vaccines. We would like to enforce. After April, Daiichi Sankyo Biotech will be a new manufacturing company under supply chain unit and is expected to contribute to the group through improving supply and quality by enforcing its GMP system. We aim to strengthen the supply chain system and structure within the group through this reorganization. Now it's the U.S. business. DSI's midterm objective was to establish pain franchise and achieve sales revenue exceeding JPY 100 billion by 2020. We have revisited the increasingly difficult opioid market situation in the U.S., and decision was made to return all rights regarding CL-108 and migalastat's development, which was ongoing in U.S. and EU, has failed.
We have revisited the U.S. pain business. Given the complex market environment surrounding opioids in the U.S., we are committed to marketing our three main pain care products, MOVANTIK, MORPHABOND, and RoxyBond, in a responsible manner while responding to patient needs. We have established the so-called Commitments in Pain Care, which is a program dedicated to awareness and education around responsible pain management. In response to the set business environment changes, and in preparation for upcoming oncology pipeline, we restructured U.S. commercial organizations as a reduced headcounts by about 280, or one-fourth, in U.S. commercial organization, including sales force and home office. This is the Luitpold business midterm business plan target and progress.
With major focus on IV iron franchise with Venofer and Injectafer, and generic injectable franchise in fiscal year 2017, Luitpold's revenue reached JPY 100 billion level versus JPY 150 billion target set for 2020 midterm plan.
This is the iron IV franchise. The Venofer, indicated for IDA associated with the CKD, as well as the Injectafer indicated for the iron deficiency anemia associated with various diseases in addition to CKD. Those two products are offered by Luitpold, and they have shares of more than 75% with those products, two products in the market. They have a confirmed position as a leading company in the iron markets in the United States. In order to maximize the product values of the Injectafer, we have various actions. In 2017, Luitpold DSI have made a consolidated sales team together. In addition to the oncologists and hemato-oncologists, which have been promoted so far, they now started the promotional activities for GI and the OB/GYN specialist who deal with those iron deficiency anemia.
For further indication expansion in the future, we are now having a phase II trial, HEART-FID, targeting the heart failure patients with the iron deficiency complication. The generic injectable franchise has more than 50 products in their lineup. In order to have a sustainable growth, it is important to continue the launches of the new products one after another. In 2017, we launched five products and filed for 12 products. For 2018, we will aim six launches and seven filing. Oncology business startup planning establishment. According to midterm plans, we have the target of JPY 300 million business of the oncology by 2025, and DS-8201 ADC franchise, AML franchise, and we have a steady progress of the early development products.
In order to launch the oncology products such as DS-8201, we have improved internal organizations, and we have completed restructuring of the organization as well as the recruitment of the global leaders. Under the strong leadership of those leaders, the development, manufacturing, and sales department collaborate with each other so that they are prepared for the launches across the organizations. We are also ahead of the schedule in terms of the shifting of the internal resources into oncology. On the R&D Day last year, we said that we are going to intensively allocate the R&D resources in oncology areas at 60% in research and 70% in development by 2020. Starting with the budget for 2018, we are allocating 50% in all researches and 70% in development. That is also ahead of the schedule in the oncology development.
In order to strengthen the oncology development, we are reviewing the development organization, mainly in the U.S. Until now, we had independent organizations, specialty medicine development in charge of this cardiovascular and others, and regulatory and oncology development. We put the oncology regulatory right below the oncology development so that they can develop plans and implement the regulatory strategy specifically for the oncology, and they can strengthen the capability of the oncology development. Likewise, SM regulatory will be below the SM development, and we will streamline SM as well as strengthen the development. CV and other clinical development will be consolidated and streamlined so that we can allocate more into the oncology. Let me talk about results in 2017 oncology. In addition to ADC and AML franchise, we are going to start up the breakthrough science as a third pillar. That was explained on R&D Day.
Out of those three pillars, we are going to deliver seven NMEs in eight years by 2025. That is the 2025 vision for Cancer Enterprise. Let's talk about deliverables of DS-8201. As for the phase I trial started in August 2015, we made a presentation about its progress in main society and conferences like ASCO and ESMO. For breast cancer, the compound was designated as a breakthrough therapy in August by FDA, and we started a phase II pivotal study in October. Gastric. We started the phase II pivotal from November, and in March, it was designated as a first category by MHLW. For the NSCLC phase II study in March, and for the partnership matters, we have a collaboration with BMS for nivolumab combination and niraparib combination in the preclinical trials, also pursued, but with Puma.
We have a collaboration with the Memorial Sloan Kettering Cancer Center. In terms of the HER3 ADC, U3-1402 breast cancer trials, that started in December 2016, and that is making good progress. U3-1402 lung cancer that started in January, also the TROP2 ADC DS-1062 trial has started in February. For generating a new ADC for research, we have a collaboration and option contract for ADC with Glycotope company for PankoMab antibody. This is AML franchise, quizartinib second-line AML trial, QuANTUM-First. We have completed enrollment by August last year, and we are going to get the top-line results in the first quarter of this year. DS-3032, we have talked about the quizartinib concomitant trials, but we are going to talk about azacitidine trial. We presented non-Hodgkin lymphoma interim results in ASH in December for DS-3201.
We have a collaboration with MD Anderson Cancer Center for research collaboration, so that we will confirm the combination results with other compounds of ours and others, and we will have many clinical research is preclinical. For AML, we can combine the other targets drugs with a different MOA so that we can find new treatment options. DS-3032 phase I monotherapy has confirmed its activity for AML, and it's also established its safety profile initially. DS-3032, we have many trials going on for AML with azacitidine in other countries. Having those trials, we can pursue new treatment modalities. Also, on the left, it shows the preclinical trials utilizing human AML xenograft model of rats, mouse, and this is the results of the combination therapy using DS-3032 and azacitidine.
As compared to the control, we can see the mono results, efficacy of anti-cancer, the DS-3032 alone, but we can also see the additive effect as well. This is a breakthrough science results. We have a TGCT with the quizartinib, and we disclosed that apply result in October from Enliven. For the oncology viruses treatment, DS-1647 and G47Δ, we have a designation for the orphan drug and regenerative medicine in July. DS-1205 AXL inhibitor combination with osimertinib is checked out in the preclinical studies for osimertinib resistance acquisition delays, and we made a presentation at ESMO. We are going to start a clinical trial soon. This is the future oncology project. This is the latest development plan for DS-8201, and blue and pink shows the breast cancer trials. I'd like to explain this a little bit.
Phase II and phase III of a breast cancer, the relationship between the two is shown in the slide. On the left, pivotal phase II is now going on for the accelerated and the conditional approval. On the right-hand side, pivotal phase II and phase III that confirms its results. It is the trial to establish the evidence for the overall survival. The other phase III at the right bottom box, that is the T-DM1 and head-to-head trial aiming for the second-line treatment for recurrent breast cancer. Those two phase III will start in second quarter. This is the recurrent breast cancer subtype classification and SoC based on that classification, and DS-8201 targets in a simplified fashion. In addition to HER2 positive, we have the HER2-low expression patient as well, and phase III for them is now under consideration.
Now I would like to highlight the green and orange portion, which is the update on colon cancer and lung cancer studies. This is the phase II study design in colorectal cancer. As already explained in R&D Day, this study was already initiated in March, and non-small cell lung cancer study is planned to commence in the first quarter. This non-small cell lung cancer study is a bit different from other studies because it enrolls HER2-mutated subjects in a separate cohort. There are data suggesting that there is quite a few lung cancer patients who are HER2 mutants. The timing of the next oncology data disclosure in June at ASCO Chicago, USA, presentation on DS-8201 phase I study updates, and on U3-1402 preliminary study in breast cancer phase I/II have been accepted. Presentation on DS-8201 is expected to be oral on the 1st of June.
Also, at San Antonio Breast Cancer Symposium in December 2017, we already reported that in HER2 low, response rate was 31%. Antoine said that important and interesting updates are awaited in June ASCO. We also plan to share results of the interstitial lung disease adjudication committee assessment. Incidentally, on June 2nd, Saturday at 9:00 A.M. Japan time, we are scheduling a conference call from ASCO to review details of presentation in ASCO. Presentation will be given by Antoine-s an. About our initiative to transform SOCs. At Daiichi Sankyo, we are undertaking various activities with an aim to enrich our pipelines with innovative projects that can potentially change the standard of care. One of special focus is regenerative medicine and cell therapy. In 2017, in order to strengthen R&D structure, we established the cell therapy lab.
We also advanced some activities, such as in licensing alliance, like KTE-C19, a CAR T therapy, a HER2 cell for severe ischemic heart failure, and CapSCs, capillary stem cells, and iPS-derived cardiomyocytes sheet. I would like to today give you some update about KTE-C19 project. CAR T therapy is an autologous, genetically modified T cells expressing CAR, chimeric antigen receptor. When CAR molecule recognizes CD19 antigen on tumor cells, they transmit activation signals to T cells, which can then kill cancer cells. In the U.S., approval was already given, but also in Japan, we will start a phase II study in refractory relapse, large B-cell lymphoma. In preparation for this Japan study, PMDA consultation to initiate clinical study has already been complete, and also a logistic process to expedite dosing is under construction as well.
As a part of that, we signed clinical supply manufacturing contract with Hitachi Chemical. Dosing to patient will start from the latter half of this fiscal year. Regarding DS-5141, the top-line result has been released on Wednesday. Although expression of dystrophin protein was only partially identified in some patients, skipping of exon 45 was clearly confirmed in all subjects, and there were no safety concerns as well. The study will continue with study period extended to 48 weeks. We are committed to advance this project so that we can deliver this new treatment option to patients suffering from the muscular dystrophy as early as possible. I would like to talk about enhancing profit-generating capabilities. One of our midterm plan target is to push forward with massive cost reduction and streamline measures on a groupwide basis.
By enhancing procurement, our target was to generate JPY 50 billion savings on a cumulative basis during the midterm plan period for indirect materials. So far, savings is JPY 13.2 billion and JPY 18.2 billion in 2016 and 2017, respectively, was achieved. For optimization of manufacturing system, we closed Hiratsuka plant of Daiichi Sankyo Chemical Pharma, also sales organization U.S. was restructured in line with our strategic review of our U.S. pain business as well. In related to R&D, we've closed Daiichi Sankyo India and Asubio Pharma. Streamlining of assets and enhancing capital efficiency is important, and we are reducing cross-sharing shares. In fiscal year 2019, additional nine stocks worth JPY 14.4 billion was sold. We will further reduce to an appropriate level going forward. Now about shareholder returns.
In the midterm plan, our shareholder returns policy called for more than JPY 90 per share annual ordinary dividends payment, and the flexible acquisition of our own shares, and total return ratio of 100% or more during the period of the plan. In fiscal year 2017, the ordinary dividend was JPY 70 per share, and treasury stock acquisition was JPY 50 billion. As a result, total return ratio was 159.1% on a single year basis and 169.2% on a two-year cumulative basis. We will carry on the same effort in accordance to this policy. Fiscal year 2018 consolidate forecast will be explained. The forecast for fiscal year 2018 is sales revenue JPY 910 billion and operating profit of JPY 98 billion.
We project substantial revenue decline, however, operating profit is projected to increase versus previous year because in fiscal year 2017, there were special factors, including impairment loss. This is the comparison versus 2017, excluding special factors. In terms of revenues. Due to the impact coming from old medicines patent cliff and from price revisions in Japan, we project JPY 910 billion, a decline of 5.2% or JPY 50.2 billion. In terms of cost of sales, a decrease of JPY 17 billion is projected in association with decline in revenue. In terms of SG&A, a decrease of JPY 5.4 billion is projected coming from U.S. sales restructuring and continual cost-down efforts. In terms of R&D expenses, we project an increase of JPY 4.1 billion due to investment required for investment of studies in DS-8201 and U3-1402, as well as some new studies.
In face of increased advanced investments in oncology R&D and for business infrastructures, continuous efforts for cost reduction and streamlining of assets will be pursued. However, impact of patent cliff and price revision is quite substantial. Therefore, operating profit of JPY 78 billion, a 29% reduction versus previous year is projected for fiscal year 2018. I'd like to talk about our review of five-year business plan. Edoxaban is growing in momentum beyond initial target, and DS-8201 and other ADC franchise, as well as AML franchise projects are progressing smoothly. That means that we are steadily taking steps forward toward meeting our vision to 2025, of becoming a global pharma innovator with competitive advantage in oncology. However, due mainly to U.S. pain business, including CL-108 and mirogabalin failure situation is now difficult to achieve the initial target.
Although we have enjoyed steady growth in Japan business until today, the recent drug price system overhaul is causing huge cloud of uncertainty to our business environment here in Japan as well. As mentioned, substantial impact from patent cliff and the price revision is expected in fiscal 2018. Operating profit is projected to fall below five-year business plan target of JPY 100 billion. Amidst adverse internal and external changes affecting profitability, Daiichi Sankyo is examining initiatives to support business profitability. Upon finalization, those measures and new financial targets will be announced. That's all for my presentations. Please refer to the appendix materials for further details later for yourselves. After this, we'd like to entertain some questions from the floor. Thank you very much.
Thank you very much. Now we'd like to take questions from the floor. Those here will be answered by Dr. Manabe, as well as Mr. Nakayama, the Representative Director and Chairman and CEO, and Mr. Sai, CFO, and Dr. Glenn Gormley, Global Head R&D, Senior Executive Officer. Depending on the type of questions, those members will answer the question respectively. When you ask questions, please tell us your name and where you're from, please. Please start with the gentleman in the middle, second row, please. Citigroup, Yamaguchi. I was thinking about many questions, but I like to confirm your last statement. We're visiting your five-year business plans, although it is not written on the slides, but important measures will be reviewed. After that, you said you're going to make a disclosure, you're going to talk about it.
I don't think you can tell us at the moment. However, apparently, those numbers are not going to be achieved. The numbers here shown today are rather low, but those measures are to be including the measures, for those. Could you explain what you said in the last sentence, please?
Back to your question, at the moment, the business management and Mr. Nakayama, and we are visiting those business plans. He's going to answer the question.
I have two sides. One is that mid and long-term perspective, we need to accelerate growth potential, we need to have actions as well as the actions to improve the profits. We are working on that at the moment. Please wait. When one is decided, are you going to tell us, right? Second question, DMD drug. Of course, details of the data is not disclosed at the moment. However, as compared to the current drugs, what is the percentage of the Western blot, for instance? Quantitation is using a Western blot. However, it is still being reconsidered, because the amount of the expression is still very low, and those preceding drugs, they go only up to a certain percentage, single digits, so it will be lower. The preceding drug is lower in terms of the expression, but is it seriously lower?
We are seeing some expressions. They are expressions. However, for some of the patients, we are seeing less of those than expectation, but mainstream area, it has been already revealed in A. Edoxaban, seeing the numbers, the shares are kind of stagnating, I think, but globally, Europe and Japan altogether, it is growing and we're seeing the expansion usually after those growth curve plateaus. You're trying to reach number one and number two now. How far do you think you can go up to those two drugs? On the left graph, the last two points, two dots of the red line may seem plateaued, but two, a third or fourth dots before that point of time has been on the good growth. I think it will continue.
It is a kind of a transient effect of the end of the fiscal year effect, I think. Next question, please.
In the front, toward the right, please. UBS, Seki. Thank you very much for your explanations. On page 72 again, the red dot in the middle, you talk about the deterioration of Japanese business environment. All along, you enjoyed number one share in the Japanese pharmaceutical market, you are up to maintain that. Given that you have the ambition to maintain number one share in Japan as well, even if the business environment is deteriorating, or are you going to review that? I think we may have to examine, but this target wouldn't change just because the business environment deteriorated. The robustness of that, or maybe the growth expected may need to be expected for the Japanese market as well for Daiichi Sankyo. Right. Also, you talk about the measures to support profitability as well toward the middle in the box.
In terms of headcounts. You may not know what you will be doing with the headcounts as well. For this purpose, we're going to seek and explore all possibilities, including headcounts as well. Okay. Regarding DS-8201 as well, this is the third-line base breast cancer in the U.S. When is the filing coming for breast cancer in the U.S.? Do you have that timeline, a kind of good estimate for that timing for submission?
You recall that at our R&D day, Antoine Yver highlighted a very aggressive program in third-line breast cancer with DS-8201. He said that, and I confirm, that we are on track for 2020 as a reasonable time. However, he also indicated that we were taking every opportunity to see if that could be accelerated. We're not prepared to commit to an acceleration today, but I believe that the data continues to look stronger and stronger. You'll see that again, I think, in the ASCO meetings that Manabe-san referred to, and hopefully, you'll be able to take a look at that and convince yourself that this is looking really quite exciting.
Thank you. Regarding DS-8201, the combination with nivolumab, I think starting from January to March initially, but is this behind from the original estimates? Also on the bottom, also IO combination opportunities. Probably you don't have specifics, but can we also consider that the combination development is also on track as well?
We think that in addition to DS-8201 being used by itself, there's a very exciting opportunity to combine it with immune oncology checkpoints. We have a very strong relationship with Bristol Myers Squibb that you referred to, and that will be our lead combination. We also believe that there are other checkpoint inhibitors that will be valuable. We're in the process of arranging those collaborations with various companies, we're not in a position yet to outline those. I would say they are very much on track and looking very good.
Let me follow up. In your press release last August, you indicated nivo and the DS-8201 combination study will be initiated in the calendar first quarter this year. I'm wondering if there may be some delay or any issues.
I don't see any issues. I think we have two companies that are developing their programs very aggressively. We're working together to make sure that our partnership is good for both of us. Maybe it takes a little bit longer, but not much. It's on track as far as I'm concerned. Maybe a slight delay from what you remember, but not much.
Next question, please. The gentleman in the back please. M itsubishi UFJ Morgan Stanley Securities. Daiichi Sankyo Biotech, that's my question is about why are you going to make it a whole subsidiary for the manufacturing only biosimilars and perhaps maybe have a plan to receive orders from other companies for biosimilar productions? Do you have an idea? In terms of when it is established, I explained it with the slides, but one is we put them under the supply chain department so that chemical pharma, ProPharma It has a very good GMP-based site. Therefore, in the supply chain, we can use them to make a good and stable supply at a GMP good quality. Also, new company, Biologics, they have many technologies, Biologics, and we want to share the information and the supply chain so that finally we want to optimize the supply chain on the whole.
That is the aim.
In addition to that, while Japanese market going forward is rather non-transparent, as you said, do you have a plan to revisit your sales force organization in Japan too, like in the U.S.?
In terms of the outlook, the mid- and long-term perspective, we have to clarify what is being unfolded, we will find the optimized fashion, optimized way of having that in the future. You said that to be a number one, that is your continuous goal going forward. Of course, there should be the competitors' situation today. Probably, you need to have various actions to make in order to be number one. Rather than the numbers, as you said today, do you have plans for M&A, for instance, to look for the scales or size going forward? We say the number one as our aim, but the most important thing is we want to become number one in terms of quality and quantity. Therefore, in result, the patent products, we prefer to have them, those patent proprietary products which attract other people.
If we can make ourselves be attractive that way with many of those attractive products like that, we can attract other companies as well, and we will be able to achieve both revenue and profit as results. Next question.
Toward the middle. Toward the back. Tokio Marine Asset Management, my name is Mizuta, I have several. Regarding OTC in Japan as well, how is that positioned today? I'd like to know your future prospects related to OTC business. Will you be pursuing growth, or do you expect growth from OTC business here in Japan? This is one of midterm challenges. Allow me to respond. Here in Japan, we have the ethical generic vaccine and OTC, we have four major businesses. We have an extensive diversification of businesses. Given that was a key part of our strategies going forward. On a midterm basis, we need to think what is maybe valid.
The ethical pharmaceutical was done, and then they become switch OTC, and because of that, we wanted to make good circulations between the two and receive synergies, including Loxonin and others. I think the circulation is going well so far between ethical product and OTCs. Within the new business market environment, I don't know how they're effective with four. Regarding the edoxaban, you have lifecycle management activities to generate and accumulate data. You have many data generation activities. Based on this, will you leverage that to grow the U.S. business as well? Would that be possible to leverage those data that you generate for U.S.? Yes. What we have presented is LCM-related to LCM activities to maximize edoxaban's product values. That would not be directly related to our submission in the U.S. In U.S., deficit market situation continues.
We still project tough situation in U.S. Thank you very much. Regarding IIT for DS-1647 is there. If you replace a gene, I think you can use it for all kinds of indications, so it's like a platform. Do you do the right? Is it for only the indications or for the whole of the platform regarding your ownership of rights?
You're referring to the cancer oncolytic virus, I think was the question. I think you're right, that does represent a platform. It's more than just a single drug. This is our first indication, so our ability to genetically modify the virus to be able to attack only the cancer cells and not normal cells. It's been carefully designed for that one disease. If it is successful, we certainly would be very aggressive in pursuing other ways that an oncolytic virus could be used.
Thank you very much for that.
Next question, please. Will come. Speaking of the reviews of various matters of the businesses, when can we expect you to tell us about your new outlook? That way we can be ready for your talk. I prefer as soon as we can, but it involves a third party as well to some extent. Therefore, we conservatively speaking, by the second quarter results presentation day or by that time, we'd like to, but early as possible. I don't want to stick to the short-term performance so much. According to the talk today, I'm expecting various action plans and measures going forward. Guidance today for this fiscal year, today might have an outlook going forward, which is a kind of downside possibility with some of the, for instance, payments and so forth being put into, right?
Well, I think we expect going up, upside, not downside, when we design new measures. You're going to add a set of the actions which will be starting to be effective toward the end of the year, right? Of course, we need to wait for the other party because it has to mature before we tell the story to you. Back to Espha, excuse me, OTC issues. In terms of the positioning of the Espha, are you going to radically review the positioning of the Espha? Because in this particular industry, there are many movements. It's pricing of generics, that is the very point in this area. For instance, a spin-off, is that a possibility? We are not telling any specific items, but we are watching very carefully how the industry goes out and unfolds going forward. Depending on the situation, our action will come.
ROE 8% targets. According to the current profit level, it is a pretty tough target, you're not going to retract or revisit or change the ROE 8% target, right? Wrong. It is the future story, we want to clear that. Also 100% shareholders return. That is something we want to stick to as well. We think that we are going to keep that percentage. Other questions?
Right.
On the front, toward the right, please. My name is Sakai from Credit Suisse. In the U.S., you've restructured head count. I'd like to ask you some related questions. You said that you've executed, some sort of maybe cost or expense has been accrued. I'd like to know some related expenses or cost you have accrued in association with restructuring. Also on page 35, [audio distortion] business is mentioned. Its business environment will probably also change as well. There will be more competitions around. Also, this may not be directly related, but also biosimilars, the ESAs. In the renal disease, the pricing-related environment will also change as well. Given that you've talked about reviewing the Japanese business, I think the target for 2020 is very high. The [audio distortion] contribution is very high.
You need to project it right, otherwise you're going to maybe face some huge impact. There are some competitions already and related to that, our strategies is also reviewed. We have already obtained some shares because we go ahead of others. Regarding the iron deficiency anemia, there are so many patients and I think there's potential for more treatments even if competitors come around. In terms of, I think there's further potential to expand the market even with the competitions comes around. I think there's good and bad things about having a competitions. There's a bar chart on page 36. It is becoming sluggish somehow, the reported figures. There is also a potential for line indications as well. We need to put in the right strategies so that in 2020, we can meet JPY 150 billion.
We're contemplating some strategies so that we can expand and also meet these figures. What about the costs you've incurred and calculated? You didn't disclose that. You said that calculation is already complete. Have you disclosed the cost related to restructuring?
We don't disclose.
Maybe Ranbaxy legacy in Delhi. You have won JPY 60 billion in litigations. Is this being disposed? Yes, it's underway. We are also negotiating and some legal procedures are underway. Once they're ready, we'll be able to disclose, but not today. Thank you. Other questions, please.
Ebisawa speaking. Daiichi Sankyo Espha, as you said earlier. ASCA has an element of ASCA going away. Your company element, both companies contract out manufacturing to other companies because of that. With generic substitution prices coming down so much, it is probably difficult to sustain the businesses in this environment. You have AG today. Whilst continuing with AG, you would like to continue the new businesses as well. Is that what you want to do? Do you like to do something like an element, giving away the businesses to other party, for instance? What is your plan going forward?
In the pricing situation like that, AG is one of the paths that we should pursue, and we want to grow mainly in this area. We are negotiating with several companies in this area.
Depending on the negotiation, if you get more orders going forward, your business will continue, right? If with AG businesses, we can try to grow steadily. We've had some success cases in the past. Therefore, if that is well evaluated, I think we can get another one, too. Also, pricing going forward is something we should watch for, including the prices for AG.
Any further questions from the floor? On the left. My name is Arai from Merrill Lynch. Thank you very much for your explanation. Regarding DS-8201, DS-8201, HER2-low phase III development strategies. I was wondering, what is the strategies for HER2-low phase III DS-8201? Glenn will explain, but as a reference, we have some materials. You can see where you are aiming for, can we kind of project that. On the right top. Within HER2 negative, there's HER2-low. Also on the bottom, we have a box including that. Right now, we're kind of contemplating our strategy, sir. If you need to know more about details, Glenn-san can give you further explanation.
With AD201, we are very aggressively challenging the conventional use of an antibody drug conjugate. We know that KADCYLA from Roche has been developed in patients who have failed therapy, and we're now doing our phase II trial in patients who have failed KADCYLA, the post-T-DM1. We're then, at the same time, developing a program to go head-to-head against the T-DM1 or KADCYLA program. These are both positioning of AD201 in what you would consider a very conventional use of an antibody drug conjugate. What we are also observing is that there are many patients who have very low expression of HER2, so low that KADCYLA does not appear to be very effective. It's not indicated.
It's our belief that because of the bystander effect, because of the very potent payload, and our very unique linker system, that our drug will be effective in that entire population of patients that are not indicated. We've got early data, and as Dr. Manabe indicated at ASCO, we plan to update you on the potential use in HER2-low. What this diagram on your screen tells you is that there are a whole group of patients that have, in the past, never been considered appropriate for this kind of therapy. We think we can redefine the classification of breast cancer treatment in a way it's never been done before. I'll need to show you that data in a few months to convince you.
Also within ASCO, regarding ASCO presentation, phase I study in HER2-low will be presented in ASCO. I wanted to get some sense of the data compared to what's already available. What new information can we expect in HER2-low with the phase I study? Is there something that you can share for now?
I cannot share additional data today. You've seen some of the very early cuts of our data. It looks very promising, but it's on a very small sample size. I think what you want to see is that sample size increased to a large enough number to be convincing. At ASCO, I'd like to show you the increased sample size and how we're doing with the efficacy. Today is probably not a good day for us to do that. You will also see at ASCO, as Dr. Manabe mentioned, that we will be giving you preliminary results for the U3-1402. This is our HER3 compound in breast cancer. The question you might have is 8201 just one drug, or is it a platform that can be used in many different ways by changing the antibody?
Here's our first example where we've changed from HER2 to HER3. At ASCO, I think we'll convince you that this is getting even more exciting than it is today.
Also, regarding U3-1402, will you be sharing some efficacy data in HER2 low?
We will be showing 8201 HER2 low efficacy data. Then we will be showing you the HER3 ADC data that we have to date.
So depending on the enrolled subjects it really depends what we can share in the ASCO. Thank you very much for that.
May I? As to Sakai-san's question earlier asking about expenses for the restructuring not included. It sounded like it is not included, but it is inclusive of that. Page eight has numbers. JPY 2.8 billion actual expenses are included for the restructuring manpower. Other questions, please. Hashiguchi speaking. I have one question. DS-8201. What is the basic principle idea for the future development? According to today's explanation for the patients with the overexpression of the HER2, those are the basic audience of the drug. HER2 mutation patients, for instance, what do you think about the development of the products for those patients? The Roche product is, for instance, for the mutation patients. For the mutation patients they have apparently higher efficacy for the patients.
Gene sequences will be more often used going forward, and therefore the patients with the potential efficacy can be discovered quite easily thanks to the gene sequencing going forward. What do you think about it? I'll answer the question, and Glenn can add later on. HER2 mutation. We are thinking about starting with the lung cancer as well because we are seeing that in many cancer types. But as biomarkers the lung is most progressed in a way. NSCLC area, that's what we can start with that for mutation. Glenn, can you add?
I know you've been following this story very closely. What you've seen is this has gone from a single observation to now a clinical development program that includes breast cancer, it includes multiple conditions within breast cancer, gastric cancer, now colorectal cancer, non-small cell lung cancer, three or four IO combinations. We are now engaged in partnerships with other companies who have antibodies that we believe could be combined with our platform and produce efficacy in diseases that we never thought possible before. The question you're asking now is can we expand that science into mutated forms? It is something we are thinking very carefully about. We are working through that idea. But we have to execute what we just showed you flawlessly. We need to deliver all of these trials.
You also may remember that Dr. Yver at R&D Day said that we now have new payloads and new linkers that we've developed. He gave you a hint that those new payloads may be significantly more powerful than our current topoisomerase. The program is exploding in possibilities. It is moving extremely rapidly. We have shifted our resources almost entirely to make sure this can get done. Now, of course, you're beginning to think, what else can you do? That's a great idea. One step at a time. We will get to that answer as soon as we can.
Are there any further questions from the floor? On the middle. Toward the middle, please. My name is Onishi from Okasan Securities. I have two questions for you. One is the pain business in U.S., JPY 100 billion target versus that you're going to go short, you're going to revisit. Probably you had unexpected development expenses. How much do you plan today? You said that you're going to maybe accelerate the investments on the oncologies. Are those connected? Originally, we've discontinued mirogabalin development, and CL-108 was returned. Those two were the planned development, and they were both discontinued. There will be no additionals going forward. Regarding those portions, those that you did an expense, those are not large in terms of figures. Mirogabalin discontinuation is there, it's not so large.
My next question is, Takeda has such large acquisitions. Seeing that, I was wondering at Daiichi Sankyo, I was kind of seeing how you perceive. Given the competitions, do you think that move will impact you? As you review that sort of a business environment change, did you kind of incorporate that as maybe a risk or threat? Maybe everyone has different perceptions and impressions. Allow me to speak and then pass over to Nagamasa-san later on if needed. I've been staying in these industries, and I've been perceiving Takeda's strategies, and I have friends there. My impression is that I think Takeda's strategies is changing and be different from Daiichi Sankyo's. I think their strategy is totally different from ours. That's my impression.
Regarding their move in M&A, non-cash stocks are being utilized, and I was wondering how that will settle going forward. We are a Japan-origin global pharma, and we're taking on similar challenges. We're going to monitor. I think we welcome that they will be doing good as the same Japanese pharma. I'm not in the position to talk about their negotiations, but the internal assets needs to be leveraged to commercialize products and also to acquire external assets as well. I think that basic things is quite similar in Daiichi Sankyo as well. 8201 franchise will be accelerated, and including other internal assets and opportunities as well, and also looking for opportunities to acquire something from external. I think what they're doing is nothing new.
They use treasury stocks, and in terms of measures, I think they may generate some varieties of results. We kind of want to extend best wishes. I think we've exhausted by two of us.
Other questions, please. The gentleman in the back, please. Mizuno from Tokio Marine Asset Management. The DMD. For some patients, you had the expressions confirmed that depending on where you took the biopsy from, even for one patient, sometimes you had that expressed, others not. That can be possible. What do you think? Is it possible?
That possibility cannot be denied. However, thinking about condition of the patient, we cannot take those biopsies very frequently. As expressions, either the protein expressed in the musculoskeletal area. At the moment, we only took a small amount, only a part expressed, therefore frequency and also expression of protein. Unless they goes up enough, it is kind of difficult to bring that knowledge to the actual product.
Thank you very much. Other questions, please.
Are there any further questions from the floor? If not, we are ready to announce the closing of this session. Thank you very much.