Operator: It is now time. We would like to begin the briefing session on the financial results from Q1 fiscal 2026 of Eisai Company Limited. Today, this will be held in hybrid format, including in-person attendance and online attendance. Please download the materials from the website. I would like to introduce the speakers today, Mr. Keisuke Naito, COO and Chief Growth Officer; and Mr. Takuya Oyama, CFO and Chief IR Officer. First, Mr. Oyama CFO, will present the financial results, after which Mr. Naito, COO, will report on the overall business. Mr. Oyama, CFO, please.
Takuya Oyama: Everyone, thank you very much for gathering to attend this session out of your busy schedule. Let me begin with our financial highlights for the first quarter of fiscal year 2026. Revenue for the first quarter of fiscal year 2026 was JPY 234.3 billion, a 15.6% increase from a year earlier. The Pharmaceutical business, which is our organic business grew significantly, achieving double-digit revenue growth. Operating profit reached JPY 24.7 billion, a 19.2% increase year-on-year. This double-digit increase was achieved, thanks to significant global growth in our major products, Lenvima, Dayvigo and LEQEMBI. Progress towards our 2026 performance forecast is steady, with revenue at 27% and operating profit at 35%. Next slide, please. This page provides details of our consolidated financial results for the first quarter of fiscal year 2026. Revenue increased by 16% to JPY 234.3 billion, driven by the growth of our Pharmaceutical business, which is centered on our major products, 3L, LENVIMA, DAYVIGO and LEQEMBI. Cost of sales was JPY 51.1 billion and the cost of sales ratio to revenue was 21.8%. Although the cost ratio increased year-on-year, it was approximately controlled within the planned range through cost reduction efforts. As a result, gross profit reached JPY 183.2 billion, up 14.5% year-on-year. R&D expenses increased by 12.7% to JPY 43.7 billion, reflecting a proactive investment of resources in next-generation key projects. Selling, general and administrative expenses increased by 14.6% to JPY 114.8 billion due to increased profit sharing expenses associated with LENVIMA revenue growth and aggressive proactive investment in LEQEMBI. As a result, operating profit was JPY 24.7 billion, up 19.2%. Core operating profit was JPY 24.7 billion, a 13.9% increase, and profit for the period was JPY 18.2 billion, up 26%. Progress towards achieving the full year forecast is on track with revenue at 26.5% and operating profit and core operating profit at 35.3%. Next slide, please. This page shows the factors that increased or decreased revenue. As shown by the second light blue bar from the left, revenue for our major products, 3L, LENVIMA, DAYVIGO and LEQEMBI increased by JPY 24.8 billion from the previous year, and revenue for our Pharmaceutical business expanded by 16% to JPY 230.9 billion. Revenue of products other than the 3L was also strong. Overall revenue increased by JPY 31.7 billion to JPY 234.3 billion. Next slide. This page shows the factors that caused the increases or decreases in operating profit. Gross profit increased by JPY 23.2 billion due to the growth of the pharmaceutical business, driven by the growth of our 3L business. R&D expenses increased by JPY 4.9 billion due to continued proactive investment in key projects such as the clinical trial of LEQEMBI for preclinical AD and the anti-MTBR tau antibody E2814. SG&A expenses increased by JPY 14.7 billion due to higher profit sharing expenses associated with LENVIMA revenue growth and proactive investment in LEQEMBI. There are no other significant factors contributing to increases or decreases in other income and expenses. As a result of the above, both Operating profit and core operating profit reached JPY 24.7 billion, representing a significant increase in profit. Furthermore, while we had planned to achieve profitability on a commercial basis this fiscal year, excluding LEQEMBI's R&D expenses, we posted our first-ever profit in the first quarter, thanks to LEQEMBI's strong growth, ongoing cost control and the prioritized allocation of SG&A expenses to key markets. We will continue to work diligently towards achieving full year commercial base profitability. This concludes my part. Next, our COO, Mr. Naito, will give us an update on our business. COO, Naito, please.
Haruo Naito: From here, I will explain the recent business progress and the pipeline that will support medium- to long-term growth. First, I will present business updates for the 3 products, LENVIMA, DAYVIGO and LEQEMBI, which are driving our growth. so-called 3L products, business updates are as follows. In particular, regarding LEQEMBI, I will explain the progress toward maximizing its value from the perspectives of IQLIK subcutaneous injection with auto-injector approved in the U.S. for initiation treatment, the establishment of a platform that connects its high dosing convenience to access to treatment, the real-world evidence supporting the long-term treatment value presented at AIC 2026 and the implementation of blood-based biomarker or BBM. Regarding the pipeline, I will explain the progress of next-generation AD disease-modifying drugs, including the announcement of the etalanetug biomarker data presented at AIC. Furthermore, I will introduce our drug discovery aimed at realizing Make AD a curable disease, where Amyloid, Tau and Neurodegeneration are considered as an AD continuum, the Orexin-pathway Platform and the future key events for the pipeline. Let's talk about LENVIMA. First quarter revenue reached JPY 97.3 billion, up 16% year-on-year. In addition to the impact of exchange rates, sustained demand growth, particularly in the United States is driving this growth. In the U.S., it continues to hold a top market share in the TKI market for renal cell carcinoma, endometrial cancer, hepatocellular carcinoma and thyroid cancer. 11 years after its launch, it has grown into a strong revenue foundation for our company, contributing to approximately 620,000 patients in 83 countries. The addition of a new indication based on the results of LITESPARK-011 on patients with advanced renal cell carcinoma with prior treatment with anti-PD-1 or PD-L1 therapies is scheduled to reach a PDUFA action date, the target deadline for FDA's review in the U.S. on October 4, 2026. We aim to achieve our full year forecast of JPY 345 billion through both the sustained growth of existing indications and the expansion of indications through life cycle management. Next is DAYVIGO. First quarter revenue reached JPY 18.9 billion, up 38% year-on-year with growth across all regions. We are on track to achieve our full year forecast of JPY 73.5 billion. In Japan, supported by its ability to improve both sleep onset and sleep maintenance, it has maintained the #1 market share in both sales and the number of patients treated in the dual orexin receptor antagonist segment according to our estimate based on JMTC data. It has continued the steady growth in the U.S., Canada and China as well. Furthermore, in July, we submitted applications for approval in the U.K. and Europe for the treatment of chronic insomnia. Having already been approved in 29 countries and territories, it will further accelerate growth as a global brand. The knowledge we've gained in orexin drug discovery with DAYVIGO is also leading to our next-generation orexin platform, which I will explain later. Next, please. Next is LEQEMBI. First quarter revenue reached JPY 29.3 billion, up 27% year-on-year. Excluding our estimated temporary impact of stockpiling by distributors in China that occurred in the same period last year, revenue increased by 64% year-on-year, indicating continued strong growth on a real demand basis. In the United States, in particular, supported by the increase in the number of patients with Early AD and the expansion of blood biomarker testing volumes, LEQEMBI continued to grow, maintaining its leading share in terms of the number of patients treated based on our estimates. Furthermore, on July 13, LEQEMBI IQLIK was approved by FDA for initiation treatment. In Japan, demand is expanding while absorbing the impact of drug price revisions. In China, reimbursement has commenced under several commercial insurance programs and negotiations with authorities for reimbursement are ongoing in various countries across EMEA. Currently, we have obtained approval in 53 countries and territories for Early AD. We aim to achieve our full year forecast of JPY 143.5 billion by leveraging new technological innovations such as IQLIK and BBM to drive growth. I would now like to share with you our efforts to maximize the value of LEQEMBI. LEQEMBI is the only anti-A-beta antibody that can be administered long term that suppresses the disease progression as well as slows the decline in cognitive function and activities of daily living. In the United States, on July 13, IQLIK initiation treatment approval was granted and sales is expected to begin in late August. With this approval, from the start of the treatment, patients are able to choose from IV or IQLIK. From the initiation therapy to maintenance treatment, treatment options can be offered based on patient circumstances. The major value of IQLIK comes not only from its new formulation, but after two consecutive treatments under the direct guidance of health care professionals, home administration becomes possible for patients when deemed appropriate. This reduces the burden to travel to clinics for patients and care partners. It also is expected to reduce burden on medical institutions in terms of infusion-related human resource and equipment need. At AAIC2026, modeling and simulation-based analysis was presented showing equivalent exposure between once-weekly subcutaneous and IV treatment and projected equivalency of clinical efficacy and amyloid removal. Exposure-related AEs are projected to be similar to IV administration and the safety profile of SC administration is generally similar to IV. According to the device evaluation, 94% responded that it is easy to use. We believe IQLIK will expand the treatment options for patients, making LEQEMBI treatment easier to start and to stay on. On the other hand, approval and sales of products alone do not lead to the start of actual treatment. To translate convenience offered by IQLIK to improve patient access and LEQEMBI growth, development of three key foundations is important. First, streamlining the treatment access, including coverage and reimbursement and prior authorization. Second, standardization of diagnosis and treatment initiation flow from testing to documentation of results, benefits verification for each patient and coordination with specialty pharmacies. Third, enhanced support structure for home administration and treatment continuation, including drug delivery, administration cleaning, storage and continuous shipping management and sending of reminders about drug administration and MRI. Our aim is to establish conditions not only for clinics to prescribe LEQEMBI but for patients to actually start receiving treatment and continue with treatment. Towards the launch in late August, we will proceed in collaboration with the payers, medical institutions and specialty pharmacies to ensure the establishment of the three key foundations. We will translate the convenience of IQLIK into better patient access and advance LEQEMBI into the next phase of medium-term growth. Next, turning to real-world data that demonstrates long-term treatment continuation. This is not RCT, but this is an observation data using chart. At AAIC2026, LEADER study data from 432 Early AD patients across 13 clinical practices in the U.S. was presented. 82.5% of patients whose disease stage were evaluated were stable or improved. Treatment retention rate was 86.6% at the time of chart extraction of all 432 patients. Safety observations were consistent with the FDA-approved label. Most area events were asymptomatic or mild on imaging. There were no reports of macrohemorrhage or treatment-related deaths. Among 204 patients treated for more than 18 months who continue to be on treatment at the time of chart extraction, 161 or 78.9% transitioned to maintenance treatment with IQLIK or IV and remains on treatment. Based on these, we consider the data to be important real-world evidence that supports LEQEMBI treatment continuation, consistency in safety and the current usage of maintenance therapy. To maximize treatment opportunities with LEQEMBI, it is important to standardize A-beta diagnosis and to improve patient access. Blood-based biomarkers put less burden physically on bodies and can alleviate geographic constraints and PET and CSF testing capacity constraints. By using BBM as triage, PET and CSF A-beta positivity rates can be increased to efficiently use limited testing resource. BBMs that satisfy certain performance standards may be a means of A-beta pathology confirmation in place of PET or CSF. According to estimates by Eisai in the U.S., BBM tests increased the number by 75% in fiscal '25 year-on-year. The ratio of BBM in A-beta confirmatory testing is expected to increase from 15% in fiscal '25 to around 50% in fiscal '28. The environment surrounding BBM is rapidly becoming ready, centering around p-Tau217 in the U.S., Europe and Japan, there has been progress in approval, regulatory filing and commercial testing availability. Development of guidelines and treatment infrastructure is accelerating. With BBM, we aim to expand the base of patients who will seek diagnosis and reduce time required for diagnosis to expand LEQEMBI treatment initiation opportunities. The combination of BBM for diagnosis and IQLIK for treatment are expected to improve the overall flow from diagnosis to treatment continuation for patients. I would now like to turn to the next-generation AD drug discovery. Etalanetug is at the core of tau aggregates and targets MTBR tau responsible for tau propagation. Through binding with tau seeds, etalanetug promotes removal of microglia to suppress tau -- removal in microglia to suppress tau propagation and aggregation. 103 Study in dominantly inherited Alzheimer's disease, patients achieved 62% reduction of eMTBR-tau243 in CSF in 3 months and 89% reduction in 9 months. 78% reduction in plasma in 3 months and over 90% reduction in 9 months were also observed, demonstrating consistent changes in biomarkers in both CSF and plasma. In tau PET, the tendency of suppressing progress on reducing tau pathology was also observed in each participant. As of now, these do not demonstrate efficacy in clinical symptoms, but we believe that lowering of eMTBR-tau243 and tau PET tendency support the effect on tau pathology targeted by etalanetug, and we believe that proof of mechanism was obtained. As presented at AAIC, plasma eMTBR-tau243 may potentially be used as blood biomarker for more convenient way to evaluate tau pathology in the brain. The next important data to consider will be the top line data from Phase II study in sporadic AD patients expected in fiscal 2027 and from tau next-gen study expected in fiscal 2028. About tau and etalanetug, I have just discussed, but AD progression is considered in 3 domains of A-amyloid, T-tau and N-neurodegeneration. As we pursue the next-generation drug discovery regarding amyloid in AHEAD3-45 study in preclinical AD patients before the onset of cognitive symptoms to demonstrate the AD would not develop LEQEMBI is tested. This is a Phase III study designed based on FDA and EMA guidance. We expect to obtain data in fiscal '28. Preclinical AD population is estimated to be 400 million globally, but not all will be target patients. Considering testing, diagnosis and treatment access, Eisai assumes that there are approximately 2.3 million patients for AD-DMT treatment. We intend to select target patients with biomarkers and aim to respond to the unmet medical need of intervention before the onset. As for tau, etalanetug aims to suppress disease progression through intervention of tau propagation. In the future, we expect to combine A-beta pathology control with LEQEMBI and tau pathology intervention with etalanetug. Moreover, by adding intervention in neurodegeneration and neuronal function, we aim to establish treatment approach to prevent onset and progression of AD. We call such long-term vision of combining pre-onset intervention and suppression of disease progression, make AD curable. Next, moving on to orexin platform. Eisai has been addressing sleep wake regulation in insomnia with DAYVIGO, which blocks orexin receptor. Leveraging expertise from that drug discovery, currently, we are developing ledasorexton, an in-house developed agonist, which activates orexin 2 receptor agonist. In Study 101 in patients with NT1, it was shown that single-dose administration significantly reduced excessive daytime sleepiness. At the dose that demonstrated efficacy, ledasorexton was considered well tolerated with no liver dysfunction or visual abnormalities observed. Currently, Phase II Study 202 evaluating NT1 and NT2 in the same study is ongoing. Top line data is expected before the end of fiscal '26. The strategic significance of orexin drug discovery is not limited to insomnia treatment. Nighttime sleep is supported by DAYVIGO, while daytime wakefulness is supported by ledasorexton. We are developing these from both directions. And in the future, we aim to expand the potential of drug discovery to regulation of brain function networks that support daytime functioning, including cognition, behavior and social participation. This page shows the major pipeline events and strategic positions of each project in the 3-year plan. In neurology, after the U.S. approval of IQLIK initiation treatment approval in Japan is expected in Q2 fiscal '26. Ledasorexton Phase II top line data as well as E2025 CSF biomarker data are also expected in fiscal 2026. In the medium term, important data is expected from Sporadic AD etalanetug study or 202 study in fiscal '27 and from AHEAD3-45 and tau next-gen in fiscal '28. In oncology, for LENVIMA and WELIREG combination therapy, U.S. PDUFA action date is scheduled in October 2026. Serplulimab regulatory filing in Japan and E7386 top line data are also expected. These events are linked to our 3-year plan strategy, establishing LEQEMBI as standard of care, making DAYVIGO a global brand, next-generation drug discovery, including etalanetug and enhancement of oncology pipeline. By determining the scientific and business values and success probabilities of each project based on strategic positioning, resource will be allocated and plans will be executed according to the priorities so that 3-year plan can be achieved. I would like to summarize the key points from today before I end. In regards to management foundation, the strength of 3 growth products, namely LENVIMA, DAYVIGO and LEQEMBI drove year-on-year increase in both revenue and operating profit company-wide. We are making steady progress towards achieving the fiscal '26 forecast. In terms of business growth, LEQEMBI continues to achieve sustained growth, primarily driven by the U.S., DAYVIGO growth across all regions accelerated global expansion. With respect to LEQEMBI IQLIK is offering more options for treatment. BBM is advancing diagnosis environment. Combining these advances, we are enhancing foundation to expand diagnosis and treatment access for patients. In product development, in neurology, based on 8-year framework of continuum of amyloid tau and neurodegeneration, we are pursuing next-generation AD drug discovery. In orexin, leveraging the sleep wake regulation, we will expand drug discovery possibilities to data functions of cognition behavior and social participation. In oncology, in addition to LENVIMA, additional indications, licensing products and in-house products will be combined to enhance pipeline for the future growth. Going forward, we will continue to enhance the revenue earnings foundation with three growth products, and we will also drive growth through next-generation drug discovery. We will create a cycle of investment that links the current growth to the next phase of growth with disciplined resource allocation and steady execution to achieve sustained enhancement of corporate value.
Unknown Executive: We would now like to take questions first from the analysts and then questions from the members of the media. [Operator Instructions] I would first like to invite questions from analysts. Mr. Yamaguchi from Citigroup.
Hidemaru Yamaguchi: Can you hear me?
Unknown Executive: Yes, we can.
Hidemaru Yamaguchi: This is Yamaguchi from Citigroup Securities. I am asked to limit the number of questions to one. Regarding the progress of Q1, I would like to ask you questions in one question. And there is a high progress against the medium-term plan and year-on-year decline was observed for the gross profit. And however, as the start of the fiscal year, I think it is a relatively good gross profit. And do you have any take on this progress against the plan as well as the gross profit and ForEx? Any better impact or positive impact from ForEx than expected? Could you please share with us?
Unknown Executive: Thank you very much for your questions. Our CFO, Oyama, is going to respond to your question.
Takuya Oyama: Thank you very much for your questions. For the first quarter, given the strong growth of 3L products as well as other products and organic business continued to grow. Therefore, operating profit was better than the full year forecast. During the first quarter, our plan for the first quarter was exceeded by the actual results. Regarding revenue, as you said, there was an impact by foreign exchange rate. But excluding ForEx impact, even after that, the results exceeded our plan. And fourth, LEQEMBI, DAYVIGO and the cost ratio of key major products have been reduced. In some areas, there are prioritized launching, but in principle, organic business has continued to grow steadily.
Hidemaru Yamaguchi: So let me ask you one follow-up question. LEQEMBI and DAYVIGO revenue has been strong. Therefore, mix has been improved. LEQEMBI and DAYVIGO individually cost of sales have been reduced for each of these?
Takuya Oyama: Yes, the cost for individual products have been reduced.
Hidemaru Yamaguchi: Compared to your expectation for the full year forecast?
Takuya Oyama: We believe that we have been able to make a steady start, good start to achieve the full year forecast.
Unknown Executive: Next, Sakai-san from UBS Securities.
Fumiyoshi Sakai: This is Sakai from UBS. Congratulations on the approval of IQLIK initiation treatment. About the Medicare reimbursement possibility starting from next month, what is your view? I believe that there is a window opening for document revision in August according to the information that I've heard, we will be making use of that. And although it was past deadline when approval was given, is it possible to still receive insurance reimbursement starting next month? LEQEMBI IQLIK one dose, and I believe it was the same BLA number. So ordinarily, the Medicare insurance reimbursement rather than new product reimbursement, this is additional indication. So the current reimbursement may be applied for initiation treatment. What is your current outlook?
Haruo Naito: Thank you for your question. About IQLIK initiation treatment and the question was on insurance reimbursement. Regarding maintenance treatment through medical exception, insurance reimbursement is provided. And therefore, for IQLIK initiation treatment, we believe we expect a similar scheme to be applied. And from 2027, payers will begin to list LEQEMBI in Medicare Part D formulary. In this way, we expect expansion of reimbursement. But based on priorities, we would like to work on ensuring reimbursement from major payers. I hope this addresses your question. Thank Mr. Haruna responsible for LEQEMBI in U.S. may have additional comments.
Katsuya Haruna: Thank you for your question. I am Haruna responsible for LEQEMBI globally. I would like to offer some additional comments. COO, Mr. Naito responded earlier. In particular, regarding the formulary listing, maintenance therapy and initiation therapy, we expect to have both on the formulary and initiation therapy approval was granted recently. And therefore, we expect a listing in the formulary for both maintenance and initiation therapy eventually.
Unknown Executive: I'd like to invite the next person to ask questions. From JPMorgan Securities, Mr. Wakao.
Seiji Wakao: Mr. Wakao from JPMorgan. I also have a question about the U.S. situation of LEQEMBI, particularly IQLIK for initiation treatment WACC or price and also contribution by IQLIK can be expected at this timing. Could you please elaborate on this? And WACC for IQLIK considering the news release regarding the IQLIK in the United States, 250 milligram per bottle or $385 per vial, then that means the price can be double the price of maintenance treatment. With this pricing, do you think that you will be able to secure enough sufficient profitability?
Unknown Executive: Thank you very much for your question. Mr. Yasuno, who is in charge of the U.S. business is going to respond.
Tatsuyuki Yasuno: Thank you very much for your question. I am in charge of U.S. business. My name is Yasuno. First, regarding the basic concept for pricing is as follows: Basic concept is to achieve price parity between the IV and IQLIK SC, on the basis of total medical costs. IQLIK, which has been explained today, will allow patients to do the self-administration at home, which will provide convenience and also reduce the cost related to the travel as well as the burden for care partners and also it will do away with the resources at medical institutions, which will be required for IV. Therefore, these are considered to be added value. These added values are reflected on the price for the IQLIK. On the other hand, the cost related to infusion for other costs than the drug itself in terms of IV, such as infusion procedure on a total medical cost basis, we have designed the pricing for IQLIK so that there will be no change in the copayment by the patients. And based upon these, we have come up with the pricing.
Seiji Wakao: 250 milligram per vial, $385 per vial, is this correct?
Tatsuyuki Yasuno: Yes, that is correct about WACC.
Seiji Wakao: Understood. Then for maintenance, and then this shall secure the profitability. An IQLIK initiation treatment, the timing of launching the IQLIK and at which point in time do you expect this IQLIK to start contributing to your performance? Do you think that there will be signs of a contribution in the second quarter onward or even ahead?
Unknown Executive: Thank you very much for your question. Currently, SC has just been launched. In the future, the convenience of SC will exceed the IV. So the share is exceeding that of IV in the future. In my presentation, I mentioned earlier, there will be additional optionality for patients to do the home administration and then introduction of new patient will be accelerated. And also the penetration of the BBM-based confirmatory diagnosis is going to be the key point for further penetration of LEQEMBI. As I mentioned in the presentation, there will be a preparation and establishment of various foundations and platforms. Therefore, for patients to be able to receive the benefits of SC should be made easier by our efforts.
Seiji Wakao: Have you started [ launch ] selling this?
Unknown Executive: Well, regarding actual situation, I'd like to ask Mr. Haruna, who is in charge of U.S. business -- global business.
Katsuya Haruna: My name is Haruna. I am in charge of global LEQEMBI business. I would like to respond. Regarding the commercial launch timing, it's scheduled to be late August. From that point onward, actual drugs will be delivered to patients. But having said that, the product itself has been approved already. Prescriptions can be started based upon the discretion of the medical institutions. When we visit the medical institutions in the United States, I see prescription have started, and we are seeing -- they are seeing increasing number of inquiries for IQLIK initiation treatment is gaining a lot of expectations throughout the United States from many medical institutions. That is the current status we see. Thank you.
Seiji Wakao: On a monthly basis, you mean that you have started to seeing the booking of sales?
Katsuya Haruna: Sales have not been recorded yet, although prescriptions have started. But the IQLIK 250 milligram to be launched in the United States, which is to come around late August. So from that point onward, I believe that the sales will start to be booked.
Unknown Executive: Next, Mr. Tony Ren from Macquarie Securities.
Tony Ren: So my question is about your effort in the U.S. to convert patients from Eli Lilly's Kisunla, which is a fixed duration therapy. I understand that you have been trying to convert Kisunla patients who stopped their fixed duration therapy, but who are also concerned about redeveloping plaques, preventing them from coming back. So can you give us some color about how that effort is going?
Unknown Executive: Thank you for your question. About the share between LEQEMBI and Kisunla, I understood your question to be on market share between the two drugs. First of all, IQVIA and other external data are the source of market share calculation. And I would like to remind you that oftentimes, these data do not cover some of the major IDNs that prescribe LEQEMBI. And about the new patients, recently, both drugs have about 50-50 market share. However, in -- after the launch of initiation therapy IQLIK, as we have been discussing, we believe that the market share may change. And this may overlap with the earlier response, but I would like to ask Mr. Haruna responsible for global business to respond further.
Katsuya Haruna: Thank you for your question. As I've mentioned earlier, in initiation therapy, IQLIK was granted approval. And in the United States, doctors began to prescribe IQLIK for initiation therapy. And I feel the expectations for IQLIK. Patients may wish to have only once monthly administration, but with the at-home administration with IQLIK, not only for patients, but for health care professionals, we expect the burden will be reduced significantly. And as presented in the presentation today, we've reported on the results from LEADER study, more than 18 months, 80% or thereabout the patients, the majority of the patients, 80% or so wish to be -- to stay on treatment and are given maintenance therapy. And so whether patients will discontinue or stay on the therapy, which was part of your question and as a matter of fact, majority of the patients wish to stay on the treatment. And what we have been consistently saying is that or our position -- a consistent position is accepted by patients and health care professionals. And with the introduction of highly convenient IQLIK, we believe that we will have greater competitive advantage. And we believe that as a result, our market share will further expand. Thank you for your question.
Tony Ren: Yes. If I may, I just have a quick follow-up. So for the patients -- for those patients who stopped Kisunla because they've reached the end of their fixed duration therapy, have you been able to convert some of them to take maintenance LEQEMBI?
Keisuke Naito: The answer is it is possible. I would like to once again ask Mr. Haruna to address that question.
Katsuya Haruna: As Mr. Naito, COO responded, according to the label from IV to IQLIK conversion is possible. And similarly, patients who stopped the treatment of Kisunla, it is possible to transition or convert to LEQEMBI. And in actual clinical practice, we are seeing such conversions.
Unknown Executive: Next, from Tokyo Tokai Intelligence Lab (sic) [ Tokai Tokyo Intelligence Lab ], Yoshida-san.
Masao Yoshida: Tokai Tokyo Intelligence Lab, my name is Yoshida. On Slide #3, Mr. Yamaguchi asked a similar question as a follow-up, and the cost of sales ratio seems to be much lower than the plan. So what is the background for this better result? In your explanation earlier, the revenue was a bit larger than the expectation and also costs were lower than the expectation. Could you please elaborate on that? And comparing the first half and the second half, first half, do you think that the loss decreasing time for LEQEMBI, then it will accelerate the reduction of the loss. And once profitability is achieved, do you think that the recovery rate of the cost is going to be slowing down? Do you -- how do you think? Could you please give us your take on this?
Unknown Executive: Thank you very much for your question. Our CFO, Oyama, is going to respond.
Takuya Oyama: Thank you very much for your questions. Cost of sales ratio was explained earlier in our response. LEQEMBI and DAYVIGO individual products, cost of sales ratio were reduced. And LENVIMA, LENVIMA's revenue has been very strong, including the positive impact of ForEx, LENVIMA's cost of sales ratio was very low, that also contributed to this better result. Regarding LEQEMBI, regarding your point about LEQEMBI, we still have the second, third and fourth quarter where we expect to see further increase of the revenue for LEQEMBI. So towards that, we are continuing to invest SG&A expenses. And excluding the R&D expenses, we would like to secure achievement of the commercial basis profitability. So as of now, it is difficult for us to mention to -- mention any trend so far. So I hope you understand.
Hidemaru Yamaguchi: Could you please share with us LEQEMBI, DAYVIGO, LENVIMA, what is the contribution ratio by -- among these three products?
Takuya Oyama: LENVIMA is contributing the most. Compared to the last fiscal year, all these have stayed at almost the same level. And compared to the plan, LENVIMA revenue was larger than expectation. That was a great factor for this better result.
Unknown Executive: Moving on to the next question. Hashiguchi-san from Daiwa Securities.
Kazuaki Hashiguchi: I'm Hashiguchi from Daiwa Securities. About vaccine drug discovery potential, you've made mention of this several times. You are conducting a study on narcolepsy, but for other indications about research and development, you've also mentioned potential research and development outside of narcolepsy indication. So regarding these indications, in ledasorexton, we will be pursuing these new indications or with a different compound, will be pursuing research and development? And regarding these indications, when do you expect to be able to begin clinical studies? What is the time line that is expected at the moment?
Unknown Executive: Thank you for those questions. Dr. Ido responsible for R&D, will respond to your question.
Katsutoshi Ido: Thank you for your question. I'm Ido, responsible for R&D. Regarding your question, we are considering both, that will be our response. As you've referred to in your question, ledasorexton Phase II study, this is covering both narcolepsy type 1 and type 2, and this study is making steady progress and compound profile will be clearly elucidated, and we expect the top line within this fiscal year. Based on the profile that is understood, we would like to develop plans for more detailed development in next fiscal year beyond. This is a platform, and we will also do research of biomarkers and relationship with other diseases may be indicated and what is the desired profile that is also explored -- in exploratory research and next-generation compounds will also be considered in the research and development. I hope this answers your question.
Kazuaki Hashiguchi: About ledasorexton drug discovery, the history of the drug discovery was presented before. I believe that a very large number of candidates were considered and one out of many candidates was identified, which gave me an impression that there is not much progress with regards to other compounds. There are compounds with different profiles that are being explored. And to what extent are you making progress in this exploratory research?
Katsutoshi Ido: As you've mentioned in your question, we presented the drug discovery story of the initial discovery out of several hundreds of thousands, we found this compound, which was a hit. But as we continue with this development, we were able to expand the library of similar compounds, family of compounds. And we are not able to disclose information, but there are compounds with very interesting profiles. So combining that library and the biology, we are pursuing next-generation drug discovery.
Unknown Executive: From Bernstein Securities, Miki Sogi.
Miki Sogi: Regarding IV and IQLIK, I have a question about margin profitability. The WACC basis calculation per patient per month. IQLIK can enjoy the WACC of 4.5x as much as IV. And monthly volume of API for drug. IQLIK consumes double because IQLIK uses 2x2, so 4 for 1 month. The other day, I asked you the question, COGS driver is mainly by API. So I assume that IQLIK can enjoy higher profitability than IV. On the other hand, LENVIMA is shrinking in mix and then that is considered to be a driver for COGS improvement. IQLIK, IV and LEQEMBI. LEQEMBI itself as a whole is going to see better profitability going forward. Is this correct understanding?
Unknown Executive: Thank you very much for your question. My answer may be overlapping partly with what we responded. Mr. Yasuno, who is in charge of the U.S. business is going to respond to your question.
Tatsuyuki Yasuno: My name is Yasuno. I am in charge of U.S. business. Thank you for your assessment. Of course, the volume of IQLIK is increasing, and we, of course, expect to see lower COGS ratio. So we expect to see a better COGS rate.
Unknown Executive: Then we would like to, next, entertain questions from the members of the media. [ Yoshino-san ] please unmute and proceed with your question.
Unknown Attendee: I'm [ Yoshino ] from Nikkan Yakugyo. I have a question on details. On Page 9, regarding LEQEMBI, maintain top share in patients receiving treatment. In what market is this anti-amyloid beta market? And maybe it is needless to mention, but could you specify market share in which market?
Unknown Executive: Thank you for your question. This is in anti-amyloid beta market. And based on claims data, this is an in-house estimate.
Unknown Executive: Any other questions from the media? [Operator Instructions]. [ Nakada- san ] please unmute yourself.
Unknown Attendee: Can you hear me?
Unknown Executive: Yes we can.
Unknown Attendee: My name is [ Nakada ]. I'm from the Nikkei Newspaper. With the weaker yen, what is going to be positive impact of the weaker yen? Or do you see any negative impact on the profitability or earnings?
Unknown Executive: CFO, Oyama is going to respond. Thank you for your question.
Takuya Oyama: Thank you very much for your question. Well, with the weaker yen, what is going to be the impact on us. We have revenue -- majority of our revenue is foreign currency denominated. There is an impact on the revenue by ForEx. But on the other hand, there are R&D expenditures and others SG&A expenses on foreign currency. So for your information, revenue year-on-year, JPY 18.9 billion was the impact of ForEx. I mean this was positively impacted by ForEx. When it comes to the SG&A and R&D expenses considered and the operating profit based upon the same ForEx, there was a JPY 1.38 billion positive impact. So out of the JPY 24.7 billion operating profit, part of which was due to ForEx impact. In principle, revenue and costs, majority of those on foreign currency denomination, but the impact on the operating profit was limited.
Unknown Executive: Would there be any other questions? If not, and later, if you have additional questions, please contact IR or PR. And with that, we would like to conclude today's briefing session. Thank you very much for joining us today. [Statements in English on this transcript were spoken by an interpreter present on the live call.]