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Operator: Thank you for joining us today for the online presentation of financial results for Q2 of the fiscal year ending December 31, 2025, for Kyowa Kirin Co., Ltd. Please note the following prior to the start of the presentation. We will keep the names and company names of all participants for a certain period of time as a participant list. Please understand this in advance. Please also note that the content of this presentation will be available on demand and as a transcript on our website, and we ask for your kind understanding of that as well. The information presented today contains forward-looking statements. Please note that there is uncertainty due to various risks. Today's speakers and Q&A sessions will include the following four speakers. They are Masashi Miyamoto, Representative Director, Chairman and Chief Executive Officer; Abdul Mullick, Representative Director, President & Chief Operating Officer; Takeyoshi Yamashita, Director, Executive Vice President & CMO; and Motohiko Kawaguchi, Managing Executive Officer and Chief Financial Officer. Today's online meeting will last up to 90 minutes. First, we will explain our overall financial results and then take your questions. Please download the documents from our IR website. Let me begin with an overview of the financial results. Mr. Miyamoto, please go ahead.
Masashi Miyamoto: Good morning, everyone. Thank you for your participation. I am Miyamoto from Kyowa Kirin. Since we don’t have much time, I would like to begin the explanation immediately. Performance summary. This is described as compared to the same period of the previous year. Revenue was JPY230.7 billion, a decrease of JPY.3 billion, or 1%, core operating profit was JPY35 billion, a decrease of JPY9.1 billion, or 21%, and interim profit was JPY16.3 billion, a decrease of JPY21.5 billion, or 57%. Revenue decreased by 1% due to the impact of last year's business restructuring in the APAC region and the NHI price reduction in Japan, despite the growth of global strategic products mainly in North America and EMEA. Core operating profit decreased 21%, mainly due to a decrease in gross profit and a 7%, or JPY3.3 billion, increase in R&D expenses. Interim profit decreased by 57% due to the impact of JPY9.4 billion in extra retirement payments related to the introduction of a special voluntary retirement program in Japan, which was announced in May. As a percentage of the full-year forecast, revenue and gross profit are 48% and 48%, respectively, but since these tend to increase toward the latter half of the fiscal year as in past years, we consider progress to be in line with the plan. Selling, general and administrative expenses and research and development expenses are also moving mostly in line with the plan. As a result of these factors, core operating profit has progressed 44%, which we believe is also in line with our plan. On the other hand, the interim profit progress rate is 29%. As I explained earlier, we had factored in a certain amount of extra retirement payments related to the introduction of a special voluntary retirement program in Japan in the third section, but this was a bit larger than the amount we had factored in. As I have explained, the basic business is moving strongly almost as planned, and we will aim to achieve the full-year plan in line with the target set at the beginning of the year. Here is a YoY analysis of revenue by region. This slide uses a format that explains the real increase or decrease excluding forex impact. In Japan, Phozevel, Duvroq and Crysvita continue to grow. On the other hand, sales of Dobovet, for which the marketing agreement was terminated last December, declined by JPY3.9 billion, and the NHI price revisions in April last year and this April this year had a negative impact, resulting in a 9% decline in sales for the Japan Region. In North America, sales increased JPY9.6 billion, or 12%, in real terms excluding forex impact. Crysvita and Poteligeo continue to grow strongly, 11% and 15% respectively in local currency terms. For EMEA, sales increased JPY0.2 billion in real terms. Crysvita and Poteligeo grew 9% and 22%, respectively, but the EMEA region as a whole grew only slightly from the previous year due to one-time revenues related to the Tostran sale last year and lower royalty income from the sale of three Established Pharmaceuticals brands. Other includes sales of established pharmaceuticals and other products in the region, which until last year had been described separately as APAC. In addition to an increase in royalties from Fasenra, sales of Libmeldy/Lenmeldy, a hematopoietic stem cell gene therapy, began to be booked in the US and increased significantly, but sales declined 8% due to a JPY6.5 billion decline in sales resulting from the restructuring of the APAC region. The total forex impact on revenue is negative JPY1.6 billion. Here is the situation by major product. This page includes forex impact. Crysvita continues to grow throughout North America, EMEA, and Japan, with revenues up 10%, or JPY8.9 billion YoY. Poteligeo also continued to grow in North America and EMEA, increasing its sales by JPY2.6 billion or 14% over the previous year. Libmeldy/Lenmeldy is solid in Europe and has recorded sales of plus 3 in the US this year, a significant increase of JPY3 billion or 206%. Phozevel has continued to steadily penetrate the market since its launch in February 2024, with sales up JPY2 billion, or 119%, from the previous year. G-Lasta sales decreased by JPY1.4 billion, or 13%, due to the impact of the NHI price revision from competing products. Technology revenues increased by JPY1.2 billion, or 5%, from the previous year due to higher royalties from Fasenra. This is a YoY analysis of core operating profit. This form is also designed to explain the real increase/decrease excluding forex impact. Gross profit was actually down JPY3.4 billion due to a 1 percentage point decline in gross margin from last year, reflecting the impact of one-time costs in cost of sales, in addition to the decline in revenue. Selling, general and administrative expenses decreased by JPY0.5 billion in total due to a decrease resulting from the reorganization of the APAC business, despite new expenses incurred this year, such as preparation costs for the launch of Ziftomenib. Research and development expenses increased by JPY3.3 billion. As for R&D project costs, we have changed to activity-based costing estimates starting this year, and although the rate of progress has been higher than in previous years, we believe that the overall progress is in line with our plan. The same is true for SG&A expenses, but the one-month effect of the new consolidation of Orchard was also a factor in the YoY increase. Gain on equity method decreased from JPY3.1 billion last year to JPY1.5 billion, mainly due to lower sales at Fujifilm Kyowa Kirin Biologics. The forex impact on core operating profit is negative JPY1.3 billion. As a result of the above, core operating profit decreased by JPY9.1 billion compared with the same period of the previous year. Core operating profit and the following sections. Sorry for the lack of clarity, but this slide shows the increase/decrease including forex impact as before. Finance/other decreased by JPY15.4 billion. The main reason for the YoY decrease was the impact of the introduction of a special voluntary retirement program in Japan announced in May, which resulted in a total of JPY9.4 billion in special voluntary retirement benefits and outplacement expenses, as well as a JPY4 billion negative forex impact compared to the previous year. As a result of the above, interim profit decreased by JPY21.5 billion compared to the same period last year. Next, we will discuss commercial updates. Crysvita. The Company's global sales for H1 of the fiscal year increased 10% YoY to JPY99.8 billion, 47% of the annual plan, which is a slightly higher rate of progress than in past years. In North America, sales continued to grow steadily, generally in line with expectations. There are many barriers for patients before starting treatment and continuing treatment, and we are continuing to increase treatment among patients and promote continuity of treatment through efforts aligned with the strategy, including activities to identify and support these barriers. In addition, Specialty Pharmacy's inventory buildup in June in anticipation of the July price revision resulted in 11% sales growth in local currency terms over the same period last year. In EMEA, the growth is also continuing, with official guidelines for XLH treatment in Europe, including the Crysvita formulation, providing a boost to disease awareness and commercial activities, resulting in a nearly 30% increase in the number of patients treated, especially adult patients, compared to the same period last year. In Japan, the activities and structure of our dedicated informative area staff have taken root and treatment among adult patients is increasing, resulting in steady growth. Poteligeo. Global revenue was JPY21.6 billion, a 14% increase over the same period last year, and 48% ahead of the annual plan, generally making steady progress as planned. Sales in North America in local currency terms increased 15%. Through evidence-based promotion, we are working to treat patients with tumor cells in their blood and to provide information about continuing treatment for patients who develop skin symptoms after receiving Poteligeo. In addition, promotional activities using machine learning and AI technologies have improved efficiency, allowing promotional activities to focus on medical facilities with high dosing potential, etc. These activities are also evolving, leading to strong growth. In Europe, in addition to strengthening the marketing system and expanding geographically, we are continuing our activities for patients presenting with skin symptoms, following North America, and are making progress in penetrating the market. That's all for the commercial update. Now I will talk about R&D. Development pipeline. Top-line data from the ROCKET-ASCEND and ASTRO trials, which are evaluating the long-term efficacy and safety of rocatinlimab in the ongoing Phase III ROCKET program, are expected to be announced in the future. Ziftomenib presented the results of the KOMET-001 trial at ASCO in June of this year for monotherapy in relapsed and refractory acute myeloid leukemia (AML) and has also been submitted to the FDA for approval. The product has been designated for priority review, and the target date for completion of the review has been set for November 30 of this year. For first-line combination therapy, the results of the Phase I study, KOMET-007, were presented at the EHA. We will discuss these data later. OTL-203 is the last patient being treated in the ongoing pivotal trial. We are ahead of our original schedule and have reached it very early, and development is progressing very well. Regarding Ziftomenib. Ziftomenib is an oral small molecule menin inhibitor for acute myeloid leukemia and AML with NPM1 mutations or KMT2A reconstitution. AML is thought to be associated with about 22,000 new diagnoses per year in the United States, about half of which are related to the regulation of gene expression involving menin. The high recurrence rate is a major problem with this disease. As for the progress, as shown on the bottom of the slide, we are planning to start Phase III of the first-line combination therapy in H2 of this year. Today, I would like to briefly present a selection of data presented at ASCO and EHA. This is the overall picture of Ziftomenib development. First line and then relapse refractory, each of which is under development. In this issue, we will briefly introduce the results of the KOMET-001 and KOMET-007. We are showing the results of the KOMET-001 study presented at ASCO. This will be efficacy. The CR/CRh rate for all patients in Phase Ib and then Phase II is 25% and the overall response rate is 35%. It is also important to note that 65% of those who achieved CR/CRh achieved MRD negativity, an indicator of achieving high remission. Looking at Phase II alone, the CR/CRh rate was 23%, which is significantly higher than the 12% in the conventional chemotherapy data. Safety. Myelosuppression is said to be a problem with existing AML therapies, but with Ziftomenib, the incidence of myelosuppression has been shown to be low. Of the adverse events, 40% are grade 3 or higher, while differentiation syndromes are 13%, all held to grade 3. QTc prolongation was low, totaling 3%, and 3% of patients discontinued Ziftomenib because of adverse events. In summary, in this study of relapsed refractory AML, Ziftomenib met its primary endpoint and demonstrated a statistically significantly higher CR/CRh rate than chemotherapy alone. The safety profile was also favorable, with a low frequency of myelosuppression, differentiation syndrome, and QTc prolongation. Based on these data, we submitted an application to the FDA for approval in June of this year. Here is the presentation at EHA and the test results of KOMET-007. This will be safety data. Grade 3 or higher adverse events related to Ziftomenib were 35%. The major adverse events were febrile neutropenia, decreased platelet count, anemia, and decreased neutrophil count, but no additional myelosuppression was observed with the use of Ziftomenib. Only one case of differentiation syndrome, and only two cases of QTc prolongation were reported, suggesting that this treatment has high tolerability overall and has the potential to be widely and long-term used for AML treatment. Efficacy. For the NPM1 mutation, the CRc was 93% and the MRD negative rate among them was 68%, and for the KMT2A reconstruction, the CRc was 89% and the MRD negative rate was 83%. The high efficacy of both gene mutation groups and the high MRD-negative rate are expected to lead to improved prognosis. In summary, we believe that Ziftomenib was still highly effective and well tolerated in this study of first-line AML. We believe that we have demonstrated good potential as a first-line combination therapy. This is the study design of KOMET-017, a Phase III study in first-line combination therapy scheduled to begin in H2 of this fiscal year. It consists of two trials: NIC, or low intensity chemotherapy, and IC, intense chemotherapy. As we have seen today, Ziftomenib has shown good results so far, and we expect good results in this Phase III study. Rocatinlimab. We believe that rocatinlimab can act directly on pathogenic T cells, which are thought to be one of the root causes of chronic inflammatory diseases via OX40, and reduce their number. Through this mechanism, which can be described as T cell rebalancing, we expect rocatinlimab to provide unique, life-changing value. The key here is immune cells called memory T cells. These cells are thought to be responsible for causing inflammation to recur even after symptoms have temporarily subsided, as they retain the memory of having experienced atopic dermatitis in the past. Even if superficial symptoms temporarily subside, these memory T cells remain in the body and can trigger allergic reactions, causing the immune system to overreact again and leading to atopic dermatitis flare-ups and subsequent chronicity. It has been suggested that rocatinlimab may also act directly on these memory T cells and reduce their number. The ongoing Phase III study is also testing this effect. Phase III, the entire ROCKET program. More than 3,300 patients have participated to date, and all four studies, HORIZON, IGNITE, SHUTTLE, and VOYAGER, have met their primary endpoints to date. And the ROCKET-ASCEND study on the right is scheduled for readout of top-line data in H2 of this year. This ROCKET-ASCEND trial is a study in which patients who have completed the other trials mentioned earlier will participate after they are finished and will examine the medium- and long-term efficacy and safety of the drug. We believe that the points indicated in the key question in the upper right corner of the slide are worth noting. For example, we will evaluate from multiple perspectives, such as the effects observed when administration is continued at a frequency of once every four weeks over the long term, whether the effects persist when the interval is extended to once every eight weeks, and whether the effects persist even after treatment is discontinued. We are now preparing to present new findings on the long-lasting efficacy and improvement of inflammatory flare-ups and chronicity, which we believe are the strengths of rocatinlimab. We hope you will find the news since the beginning of the year on page 28 and beyond. Finally, we announced on May 7 the introduction of a special voluntary retirement program in Japan. As a result, 432 employees and rehired employees decided to retire under this program. As the environment surrounding pharmaceutical companies worldwide becomes increasingly severe, Japan is also facing significant challenges in terms of the sustainability of healthcare as a whole due to the declining population and aging society. In order to respond to these changes in the external environment and ensure the realization of our vision for 2030, we are making changes in line with the Story for Vision 2030 that we announced last year. In this period of change, we will expand career development options for our employees and provide maximum support for those who seek to transition into society, while boldly transforming our business foundation in Japan to a more sustainable form and further strengthening our organizational capabilities. That is all for my explanation.
Operator: I would now like to move on to the question-and-answer session. Our first question comes from Mr. Yamaguchi of Citigroup Global Markets. Please.
Hidemaru Yamaguchi: Good morning. Thank you very much. I am Yamaguchi from Citigroup Global Markets. The first question is the gross margin ratio that you just explained, and you mentioned that Q2 also seems to have a low gross margin ratio and that there were some circumstances. Q1 was also separately mentioned, but could you first explain this factor and whether it can be eliminated in the full year?
Motohiko Kawaguchi: Thank you for your question. I, Kawaguchi, will answer your question. As explained earlier, the cost of sales ratio increased in this Q2 due to transitory factors. This was due to the retirement and write- down of some domestic items. This is a one-time event, but it was not part of the plan, so I think it may have an impact throughout the year. The scale of the amount is approximately JPY2 billion. The difference in cost ratio in Q1 and Q2 is due in part to seasonal factors here, and we believe this is a factor that is contained in the plan, and we hope you will understand that the transitory factor is JPY2 billion.
Hidemaru Yamaguchi: The second is Crysvita. I'm sure you will have some questions later on, please tell me how the balance between adults and children was this time, especially in the US? Another thing is about controlling inventory fluctuations, which are still quite significant, but please give us your thoughts on the Q2 results, including this issue. 0.5 each.
Masashi Miyamoto: Thank you for your question. I would like to ask Mr. Abdul to explain this.
Abdul Mullick: Thank you. As for the adult Crysvita penetration, it is doing very well. We are now using the latest technology to do [inaudible] on patients to make it more efficient. The overall US growth rate comes almost exclusively from adults. Then the inventory is still fluctuating. If we look at the actual demand for patients, it is growing at a steady rate in itself.
Hidemaru Yamaguchi: Is there an adult penetration rate?
Abdul Mullick: Adult penetration is 14%.
Operator: Thank you very much, Mr. Yamaguchi. Our next question comes from Mr. Muraoka of Morgan Stanley MUFG Securities. Best regards.
Shinichiro Muraoka: My name is Muraoka. Thank you very much. I am afraid I always ask the same question. Finally, ASCEND is coming out, and I am surprised here that Chugai's recent nemolizumab sells quite well when it can be differentiated. My question is, if the ASCEND can differentiate itself well, that would be great, but if the differentiation is too subtle, what kind of additional testing will be done to increase value, or will another acquisition be accelerated, etc. What are your plans if the results are disappointing? I am afraid this is an IF question, but could you please tell me?
Masashi Miyamoto: Thank you, Mr. Muraoka. I am Miyamoto. It is difficult to answer this question because, as you said, it is an IF question, but first I would like to take a hard look at the ASCEND and ASTRO lead-outs that we are working on now to see what happens. If, after seeing the result, we see that something additional is needed, we will have a thorough discussion with Amgen on that and proceed. As you say, differentiation is also important, so we would like to explore that, but the key point, as I explained, is that rocatinlimab is a substance that can target T-cell rebalancing, so I think we should think carefully about what we can do based on that.
Shinichiro Muraoka: I've asked this same question before, but I've always thought it would be nice to do a switchover test from Dupixent, but has there been much discussion here yet?
Takeyoshi Yamashita: Thank you for your question. I am Yamashita. I think there are quite a few people who are using Dupixent enrolled in ASCEND this time. I am hoping that such results will come out in the future, and also that the expectations for rocatinlimab that I mentioned earlier will become clearer. I believe that such information would be quite useful, and based on the results that emerge, I would like to consider what to do next.
Shinichiro Muraoka: When the ASCEND results come out, if you could show us the analysis of the subgroup that switched from Dupixent and those that did not, although I don’t know the timing, we would have a better understanding.
Takeyoshi Yamashita: Yes, that's right. At this point, I am unable to say what the contents of the sub-analysis will be, but at the very least, it will be very important information to analyze the effects of pretreatment, so we will analyze the data carefully and consider how much data has been accumulated in this context.
Shinichiro Muraoka: One more thing, you mentioned AI promotion of Poteligeo, and I am not sure if you mentioned this before, but I think you are talking about finding hospitals and doctors who are using it and what kind of specific AI applications it has. Is there any possibility that this could be applied to other drugs as well, or is it already being done?
Masashi Miyamoto: Thank you for the very interesting question, Mr. Muraoka. Mr. Abdul is quite knowledgeable about this, so I will let him explain it to you.
Abdul Mullick: Thank you very much. This is a new approach we have been applying for the past year now. There are a variety of patient symptoms. And T-cells [inaudible], and that's why we need to look at the patient appropriately. We will use AI to figure out if there are such patients in the big data. Previously, MRs would have to visit the facility and ask about it, but I think the use of AI will increase efficiency and will boost Poteligeo's momentum. What else to apply about it is a technology that I look forward to seeing more of in the future, as I believe this is very effective.
Shinichiro Muraoka: I understand. Thank you very much. That is all.
Operator: Thank you very much, Mr. Muraoka. Our next question comes from Mr. Wakao of JP Morgan Securities. Best regards.
Masashi Miyamoto: Thank you for your question, Mr. Wakao. I am sure you are all interested in the news this morning, so I will try to summarize it for you. First of all, as to whether there are any concrete actions planned that I could talk about, I must confess that at this point we have no way of moving forward because we do not yet know the details of the various matters that need to be addressed. What we are doing is setting up a task force team in the US. We have one in Washington, one stationed at Delegate, from Kyowa Kirin, and one at Orchard. The local team and the Japanese team are working together, exchanging information quite closely, and the entire company is now working on what is happening and what possible countermeasures can be taken. Therefore, information is circulated within the Company very quickly, and we are able to receive this morning's news before it appears in the newspapers. Unfortunately, although we have more information on tariffs and most favored nation prices than we did in Q1, we still don't know the details of what is actually going to be charged and where, so we are having a very difficult time. However, the One Big Beautiful Bill Act was also passed and will be effective from 2027, and it contains various provisions regarding drugs, so we need to look at the overall impact of these provisions in order to get a clear picture of the situation. That is my honest opinion at this point. For example, in terms of tariffs, Crysvita and Poteligeo in particular are major products, so we are currently working on various scenarios internally, including discussions on where to establish drug subsidies for these products, while considering what the impact will be. For example, if the question is whether we are factoring in any such effects toward the most recent landing this year, the answer is that we are not factoring in any such effects at this time.
Seiji Wakao: Even if it is not incorporated on the one hand, on the other hand, I think you have been able to take measures such as building up inventory, etc. Is there going to be a certain impact this quarter? Should I view it as limited?
Masashi Miyamoto: The truth is that I think it probably won't be that big this quarter, even if it is.
Seiji Wakao: I look forward to another update in the future. Second, tell us about Ziftomenib. We are happy that the data so far has been very good and that we have a good sense of the potential of the first line. What I want to know is the target patients of this Ziftomenib, the population.
Operator: I apologize, Mr. Wakao. We are not receiving audio and will check the connection separately. In the meantime, let me move on to your next question. The next question is from Mr. Hashiguchi of Daiwa Securities. Best regards.
Kazuaki Hashiguchi: I am Hashiguchi. Best regards. The first is about Crysvita's sales in North America. You mentioned that there was also an impact of inventory buildup, but if you have an estimate of how much of an impact this had quantitatively, could you please share it with us?
Masashi Miyamoto: Thank you. We announced a slight price increase in July, and there was a considerable amount of buying, and although we cannot disclose details, there was a certain degree of impact, and from that perspective, we are looking at a slight decline in Q3 and overall. However, we are estimating enough that the entire fiscal year will run along the planned lines.
Kazuaki Hashiguchi: I can’t remember right now, but did you do the same thing last year? Is the movement from Q2 to Q3 likely to be the same as last year, or will there be a greater movement from Q2 to Q3 this year than last year?
Kazuaki Hashiguchi: Secondly, regarding OTL-203, you mentioned earlier that you were able to implement the treatment for the last patient much ahead of schedule. How is this likely to affect the timing of the application for approval? The description in the back of the document has not been updated, but is it safe to assume that this may be moving forward as well? ClinicalTrials.gov says that the timeframe for the primary endpoint is two years, and many of the secondaries require up to five years of observation. At this point, do you believe that an application can be submitted once all data has been collected, or is it impossible to say without reviewing the data?
Kazuaki Hashiguchi: I understand. Thank you very much. That is all.
Operator: Thank you very much, Mr. Hashiguchi. I would like to again nominate Mr. Wakao of JP Morgan Securities. The audio cut out earlier at the point where you said in your question about Ziftomenib, so please ask again from there.
Seiji Wakao: I would like to know what to do for patients with FLT mutations regarding Ziftomenib. I believe that Phase I has started in combination with FLT3 inhibitors, and at this point we are targeting FLT3 wild type, but is it correct to understand that those with FLT3 mutations will also proceed in combination with FLT inhibitors in the future?
Seiji Wakao: Based on the mechanism of the menin inhibitor, it is scientifically possible, on a science basis, to produce efficacy even if it contains FLT3 mutations separately, right?
Takeyoshi Yamashita: You are right. The menin pathway is very important in AML, and there are many patients who have both NPM1 and FLT3 mutations. We believe that this additive effect of this treatment will bring good news to patients in such cases.
Seiji Wakao: I understand very well. Thank you very much. That is all.
Operator: Thank you very much, Mr. Wakao. Our next question comes from Mr. Ueda of Goldman Sachs Securities. Please.
Masashi Miyamoto: Thank you, Mr. Ueda. I am Miyamoto. As you mentioned, what we did last year was based on causing a modality shift in small molecule relationships to make them much smaller, so we are targeting a very limited sector. Although the exact location is undisclosed at this time, we recruited a relatively broad range of applicants, cut off only by age and length of service, so of course there were sales and head office departments, and a variety of applications from each function. It is not easy to disclose details, but we received applications from all functions. Since everyone will be retiring at the end of September, we are currently working out the details of what kind of structure we will have in place in each department for the new structure starting October 1. Regarding financial impact, Mr. Kawaguchi will explain.
Motohiko Kawaguchi: This special voluntary retirement program incurred JPY9.4 billion in other expenses. This is a slightly larger amount than we had estimated in the plan, and this part will remain as a negative factor for the entire year. However, we still aim to achieve our annual plan and performance forecast based on current profits. One of the reasons for this is that we will naturally pursue upside in our core business, and another is that there is a possibility that upside events may occur in areas below our core OP that we have not incorporated into our plan, and although this is still uncertain, it is possible that such events may occur. Our current thinking is that we want to achieve the full-year plan, including these factors.
Akinori Ueda: Second, I would like to know about the progress of R&D expenses. While there were a very large number of projects in Q1 of this fiscal year, I think the number has been reduced considerably in Q2. However, as projects are being completed, the outlook for H2 is that rocatinlimab-related cases will decrease, and will there be some leeway in the current budget? On the other hand, I am wondering if there are some areas that will become active again, including various early-stage projects, so could you please explain the progress against the current plan? Company Representative Thank you for your question. As you mentioned, as for research and development expenses, we have been able to record project expenses on an activity basis starting this year, so the seasonal leveling off has progressed considerably, and the ratio was 49% in Q2. We are currently planning to enter H2 with a level playing field, so the answer to your question is that we are making progress as planned.
Akinori Ueda: I understand. Thank you very much. That's all from me.
Operator: Thank you very much. Our next question comes from Mr. Sakai of UBS Securities. Best regards.
Masashi Miyamoto: Thank you, Mr. Sakai. I am Miyamoto. I rate myself as making extremely good progress, and ROCKET is now well on its way to preparing with Amgen for the readout of ASCEND's top-line data. As you mentioned, the FDA application for Kura's second line went extremely well, and we have been in very good communication with the FDA since then. For example, as I explained earlier, the Orchard OTL-203 project has progressed considerably ahead of schedule, and preparations for the next pipeline are also progressing smoothly, so I think that overall, the project is progressing well. In addition, we still need more activity in the pipeline, especially in the latter part of the pipeline, around the [inaudible] area, to make the pipeline more complete, and we are having Business Development take a very active role in this area. So, of course, we have not yet made any progress that we can show you, but internally we are constantly reviewing various projects as we move forward.
Fumiyoshi Sakai: As a follow-up to that, the ASCEND trial, this is the interim analysis, and this is the package that will be submitted, is it correct that this is still within the year 2025? Or is this by the end of Q1 for 2026. I would like to know the timing of this. The reason I ask is that I think this will trigger a milestone from Amgen at some point. I think it was 850 million, but I was wondering if you could give me some idea of the total, and whether the timing of that is application or approval, because I think there are a lot of things that can happen. Also, I think it is very important to know how you are going to present the results, and in what form you are going to present them jointly with Amgen. This had a very big impact on the stock price at the time of the last ROCKET, so please let me know how you are going to set this up.
Masashi Miyamoto: Thank you, Mr. Sakai. I am sure that we caused a lot of trouble at the time of HORIZON, but since then, we have been communicating closely with Amgen, based on our own reflection, and I think that we have been able to make announcements in a way that will not cause any inconvenience to you. We will continue to follow the practice. Yamashita is more knowledgeable about the application timeline, so Yamashita will explain.
Fumiyoshi Sakai: So, you don't expect any milestones at all during 2025?
Fumiyoshi Sakai: I understand. Thank you very much.
Operator: Thank you very much. The next question is from Mr. Wada of SMBC Nikko Securities. Best regards.
Motohiko Kawaguchi: Thank you for your question. I am Kawaguchi. We are very sorry about this. We have a note that it was corrected in Q1, but when we published this last February, the figure was 70%, which was simply wrong, and we just corrected that to the correct figure of 73%.
Hiroshi Wada: Basically, you are talking about a YoY increase in the percentage of overseas sales to 73%, not so much from last year, as overseas sales are growing more.
Motohiko Kawaguchi: That's what I mean.
Hiroshi Wada: One more point, I think the primary completion date on ClinicalTrials.gov for rocatinlimab is off, it was originally June 2025 or something, but it was changed to 2027 or something, is there some factor? I understand that the interim analysis data will be available this year, but I would like to know if there is any possibility of over- or under-data here. Also, I have the impression that Sanofi's amlitelimab will probably submit its first data in H2 of this year, and it seems that the application process is being expedited. I would like to ask whether the application strategy, including these developments, has changed from the initial plan. What is your thought on this?
Hiroshi Wada: I understand. Thank you very much.
Operator: Thank you, Mr. Wada. Our next question comes from Mr. Wakao of JP Morgan Securities. Best regards.
Masashi Miyamoto: Thank you, Mr. Wakao. Mr. Abdul will answer this.
Abdul Mullick: We consider the price every year. [inaudible] In the case of last year, we decided that it would be 5% once instead of twice. We balanced it with that, but we changed it depending on the situation at the time.
Seiji Wakao: So basically, it hasn't changed. I understand.
Operator: Thank you very much, Mr. Wakao. Our next question comes from Mr. Muraoka of Morgan Stanley MUFG Securities. Please.
Shinichiro Muraoka: Thank you very much. I am Muraoka from Morgan Stanley. 4951. Eye drops, I had a conversation with the IR person yesterday that the timing of the exam was delayed to September 2026. You mentioned something like the method of enrollment is special in this area, so I would like to know, to the extent possible, why the delay, and perhaps what efforts are being made to increase the probability of success? As per ClinicalTrials.gov, should we assume that there will be no updates to 4951 until around next fall, or is it better to think that there will be updates? Please advise.
Shinichiro Muraoka: So if we wait until next fall or the end of the year, we can probably be sure to hear both updates?
Takeyoshi Yamashita: We would like to proceed in that manner.
Shinichiro Muraoka: I understand. Thank you very much. That is all.
Operator: Thank you very much. This concludes the online presentation of financial results for Q2 of the fiscal year ending December 31, 2025. The audio of today's online meeting will be available on demand on our IR website. A transcript will also be available, including a Q&A session, for your review of the content. Thank you very much for your participation today. Thank you for your continued support of Kyowa Kirin. [END]