Kenji Yasukawa: Hello, everyone, Yasukawa speaking. Again, thank you very much for participating in our financial results announcement meetings, despite your busy schedule. I'm sure you have the materials at hand, as we mentioned on the page number, as I explained. Page 2 is a cautionary statement regarding forward-looking information. I'm not going to read.

Page 3 is the agenda today. As usual, I will explain the FY 2020 results and FY 2021 forecast, and I will also review the corporate strategic plan 2018. Page 4 is The consolidated results for fiscal 2020. Revenue was JPY 1.249.5 billion, down 3.9% year-on-year. Core operating profit was JPY 251.4 billion, down by 9.5% year-on-year.

The bottom half of the slide shows few basis results. Due to the booking of other expense for JPY 123 billion, the profit decrease was larger than the core basis. The operating profit reached JPY 136.1 billion, down by 44.2% year-on-year. Profit was JPY 120.6 billion, down by 38.3% year-on-year. I will explain the details on the next page and beyond.

Page 5 is the comparison of FY '20 results and the FY '19 results. As we explained from the beginning of the year, sales decreased due to termination of sales and distribution in Japan and LOE and the impact of COVID-19. On the other hand, sales of growth drivers increased steadily. So business fundamentals are trending positively. SG&A costs increased due to U.S.

XTANDI co-promotion fees by JPY 18.2 billion and reduction of our one-off cost due to reversal of loss allowance by JPY 8.2 billion. For other expenses, we promoted the efficient use and the optimization of resource allocation resulting in a reduction by more than 5% or more than JPY 20 billion. R&D expenditure increased mainly due to steady progress of fezolinetant Phase III studies and R&D expenditure of Audentes added from FY '20 for JPY 15.6 billion. Roxadustat exceeded the peak of the development stage, and in the first half of the fiscal year, some studies were suspended due to COVID-19 impact, resulting in a decrease in cost. So the expenditure was almost flat year-on-year.

Regarding full basis results. Impairment loss was booked as other expense. So profit decreased at each level year-on-year. As we announced in the second quarter earnings report, we decided to terminate the development of ASP8374, and JPY 30.2 billion impairment loss on intangible assets was booked. As we made a press release today, in the fourth quarter, we revisited the asset value of AT132 under development for XLMTM.

And we booked JPY 58.8 billion in impairment loss on intangible assets. After the receipt of FDA's notification to lift the clinical hold in December last year, we reviewed our development plan. We took into consideration a delay in approval timing in U.S. and EU compared to the assessment of the time of the acquisition and revision to the likely approved populations. We are deeply committed to the safe development of AT132 for the families and patients living with XLMTM without existing treatments right now.

We will continue to proceed with development for filings and discuss with the regulators. So there is no change to our plan. Next, Page 6. This is the comparison of FY '20 results against call basis forecast announced in August. Revenue was slightly behind full year forecast with the achievement of 99.4%.

Core operating profit achieved 100.1% of the forecast. Revenue was achieved when adjusted to exclude forex impact. Looking at revenues by 5 regions. We were behind the forecast in China. mainly because of delayed investment start for XTANDI and mirabegron and volume-based procurement of Harnal and [indiscernible] earlier than expected, reducing the volume and the price.

On the expenditure allocated to Audentes was not fully spent, which were the main variance compared to the plan or forecast. As for full basis, operating profit and profit were behind the forecast, mainly due to the putting of the impairment loss on intangible assets for AT132 in the fourth quarter, as I explained before. Page 7. Here, I'd like to explain the situation by product. XTANDI has continued to perform well since fiscal 2019.

New products such as XOSPATA and PADCEV have begun to contribute to increasing sales. Total sales of free oncology products were up by JPY 79 billion year-on-year. However, consolidated revenue was down by JPY 51.3 billion year-on-year. LOE products, such as Vesicare and Symbicort reduced the revenue by JPY 55.7 year-on-year. We booked sales until last year for Symbicort, Micardis and other in-licensing products in Japan, but there was a reduction by JPY 36.3 billion due to termination of sales and distribution in Japan.

And sales decreased due to the impact of COVID-19, particularly in the first quarter, which was also a factor behind. Such as JPY 9.4 billion decrease for U.S. Lexiscan and JPY 5.2 billion for antibacterial Geninax. The impact of COVID-19 is getting larger since the second quarter And particularly, Lexiscan is returning to the originally expected trend. So almost in line with our revised forecast, we concluded fiscal year 2020.

Next, to Page 8. I'd like to give you an update on the situation of individual products for main products. XTANDI global sales making double-digit growth, and it achieved the forecast, excluding the forex impact. In the United States, due to the impact of COVID-19, new prescriptions were less than expected, so we were slightly behind the forecast. Since the approval of M1 CSPC indication, the volume is rising.

We're expecting continuous growth mainly in early-stage prostate cancer. In China, investment has started for M1 CRPC since March this year. We're expecting a further increase in new prescriptions. XOSPATA is now marketed in 23 countries around the world. Recently, it was launched in Singapore and China.

In addition to the United States, it is contributing to the results in EU in FY '20. Global sales exceeded the forecast. Duration of treatment with XOSPATA was around 7 months recently, so it's slightly more than expected. As for PADCEV, we think it has made a rapid market penetration. On a local currency basis, it achieved the full year forecast.

Recently, EV-301 study results were presented at ASCO GU 2021 and published in New England Journal of Medicine. And NCCN granted Category 1 recommendation, the highest evidence level in the guidelines to PADCEV. So the level of interest and evaluation among oncology experts is rising. So new prescriptions are continuing to rise. The revenue in Japan has the additional education in November last year, and 2-week prescription restriction was listed in December last year.

So adoption is increasing. Mirabegron sales just slightly increased. But due to the impact of COVID-19, it was slightly behind the forecast. In China, like XTANDI, reimbursement started from March this year. We are expecting an increase in new prescriptions in the future.

In the United States, FDA granted pediatric exclusivity for Myrbetriq resulting in additional 6-month period with exclusivity. As for new products in Japan, particularly sales of EVENITY and Suglat-Family contributed to the expansion of sales, although they were affected by COVID-19. By reinforcing the use of digital channels for digital content distribution with implosion and online explanatory meetings, we are promoting the product message penetration. Next, Page 9. I'd like to explain the fiscal year 2021 forecast here.

Revenue will be JPY 1.223 trillion, up by 5.9% year-on-year. According to forecast, SG&A costs will be JPY 541 billion, up by 7.3% year-on-year. R&D expenditure will be JPY 242 billion, up 7.8% according to our forecast. As a result, core operating profit is forecast to reach JPY 270 billion, up by 7.4% year-on-year. At the bottom of this page, you can see full basis forecast.

Operating profit will be JPY 265 billion, up by 94.8% year-on-year according to forecast. Next, Page 10. Let me explain further. In FY 2021, the -- we think we can secure a 20% core operating profit margin. Sales will decrease from FY 2020 due to LOE for Vesicare in Japan, termination of sales and distribution for Celecox, Lipitor, and transfer of Eligard, legacy product in EU, and reversal of product transfer values for Dificlir and Protopic and NHI price revision.

On the other hand, we expect XTANDI and XOSPATA will continue to grow. Evrenzo will contribute to The management as a growth driver, and they will offset the negative impact, so revenue is likely to increase year-on-year. As for R&D expenditure, key late-stage products such as fezolinetant, roxadustat, we have reduced investments. But we will have more investments into primary focus. So overall, it's going to rise.

SG&A costs in FY 20'21 are expected to increase due to investments such as launch preparation costs for new products and grow strategic products and use extended co-promotion fees. Costs we do not contribute to competitiveness and enhanced value would be revisited continuously. Our basic philosophy about capital allocation is to give the top priority to business investments to realize our growth. Based on the mid- to long-term and profit growth, we will increase dividends in a stable and sustainable fashion. So there is no change in our plan.

The dividend in FY '21 will be JPY 50 by increasing the dividend by JPY 8, according to forecast. In the past 6 months, we maintained the pace of JPY 2 dividend increase per year. But we are confident we can now increase the dividend payment. I'd like to talk about the last slide -- or the last section. Next, Page 11.

Here, I'd like to talk about the FY '21 outlook for main products. First, XTANDI. Sales are expected to reach JPY 557.2 billion, up by JPY 98.8 billion year-on-year according to our forecast. In the United States, we think the volume is going to increase by more than 20% with the acquisition of the M1 CSPC indication as a main factor. We expand indication of MI CSPC in the established market, intestinal markets and reimbursement was started in China in March 8, 2021, which are also a factor for the increase.

XOSPATA sales will be JPY 36.7 billion, up by JPY 12.8 billion year-on-year, according to our forecast. In U.S. and Japan, we have established this market-leading position already. In EU, there will be more countries with reimbursement. And also in China, where it was launched recently, contribution will begin.

So these are the factors for the increase in sales. As for PADCEV, revenue will be JPY 20.1 billion, up by JPY 7.3 billion year-on-year in our forecast. I'd like to talk about the initiatives to expand the indications later. The rental sales will be JPY 8.6 billion, up by JPY 7.4 billion year-on-year according to our forecast. In Japan, we will maintain the market-leading positioning as HIF-PHI.

And by reinforcing our activities are in the non-dialysis anemia market, which was an additional education in November, we would promote the penetration further. In FY 2021, we're expecting launches in the established international markets. Next, Page 12. From here on, I'd like to talk about our initiatives for sustainable growth. Page 13.

I'd like to give you the update on the key late-stage projects. The progress since the third quarter results announcement in January this year is underlined. The top left is enzalutamide. In Europe, CHMP positive opinion was received in January this year about M0 CRPC for label update to include the OS data. As for the filing for the additional indication of M1 CSPC, last month, CHMP positive opinion was received.

So we're expecting approval soon. The left bottom is gilteritinib. In China, in January, we obtained conditional approval for relapse to refractory AML. This conditional approval is based on the global Phase III ADMIRAL study data or approval requires the results of the Phase III COMMODORE study in Chinese subsets. In the COMMODORE study, the planned interim analysis met primary endpoint OS.

In terms of the efficacy, enrollment was already completed. Based on these results, we are going to take necessary action to get full approval in China. The middle is enfortumab vedotin, EV. I'd like to talk about the progress related to the additional indication later. On the right, third from the top is fezolinetant.

In Phase III pivotal studies, SKYLIGHT 1 and 2 in U.S. and EU. During the 12-week double-blind period, all primary endpoints met the target criteria. To evaluate long-term safety, dosing will continue up to week 52. In U.S.

and EU, Phase III long-term safety study, SKYLIGHT 4, is ongoing. In the Asian region, including China, Phase III studies -- pivotal study more like 1, our long-term safety study [indiscernible] are underway. At the bottom, you can find AT132. I will use a different slide and explain later. Page 14.

I'd like to give you an update on enfortumab vedotin. In pretreated metastatic urothelial cancer, based on the results of the Phase III EV-301 Phase II EV-301 cohort II studies, we filed in Japan, EU and U.S. And the results were announced at ASCO GU in February this year. Let me explain the details of the filing. In the United States, we submitted 2 SBLAs in February.

The first SBLA is based on the confirmatory study, EV-301, where OS was achieved as primary endpoint. In platinum and PD-1/L1 inhibitor pretreated mUC indication, we're aiming to convert accelerated approval to regular approval. The second SBLA is based on the EV-201 cohort II study results, which were very positive. So with 52% ORR. We aim to expand the indication to PD-1/PD-L1 inhibitor pretreated and cis ineligible patient population.

In any SBL, priority review was granted real-time oncology review pilot program and project orders are being applied. PDUFA date was set for August 17 this year. In Europe, in March, based on EV-301 study results, we filed a submission and were granted accelerated assessment. In March, in Japan, based on EV-301 and EV-201 study results, we also filed a submission. In Europe and Japan, these are the first submissions for EV.

So we are hoping to expand the reasons of sales following the United States. Slide 15 shows the result of EV-301. The results of this study were published also in the New England Journal of Medicine. In this study, among patients with advanced urothelial cancer who had previously treated platinum-based chemotherapy and PD-1/L1 inhibitors, Enfortumab vedotin therapy was compared to chemotherapy. Regarding the efficacy, the primary endpoint, the OS status shown in the charts on the slide.

The median OS was 12.88 months in the enfortumab vedotin 8.97 months in the control chemotherapy and the hazard ratio was 0.70, showing a significant extension of OS in the enfortumab vedotin compared to the chemotherapy. The secondary endpoints such as PFS, also showed significant involvement -- improvement in the enfortumab vedotin arm compared to the control. The safety profile was consistent with prior clinical trials of enfortumab vedotin. Page 16. Now let me talk about progress in a focus area approach.

In order to build our position as a global leader in the field of gene therapy, Astellas is establishing its system and promoting multiple gene therapy programs. First, as the system, our wholly owned subsidiary, Audentes Therapeutics was integrated internally and Astellas Gene Therapies was established, which when effect April 1 of this year. It consists of 3 divisions specializing in gene therapies, including research and manufacturing, development and commercial. It will play the role of Center of Excellence in gene therapy in Astellas. Next, I report on the latest status of development programs.

As shown in the previous summary slide, the lead program, AT132, which is indicated for XLMTM has been released from the clinical hold and is under the preparation to resume clinical trials ASPIRO trials. The resumption is scheduled for this year -- excuse me, for this quarter. In addition, in parallel with the clinical trials, pre-NDA or equivalent meetings with local authorities are planned for global filings. The meeting with the U.S. FDA is planned for this quarter, and with AMA within this year.

The second program, AT845 is indicated for Pompe disease, a rare disease. The first in-human Phase I/Phase II study or FORTIS study, is underway in patients with late onset Pompe disease. And the first subject was dosed with A845 in March this year. Next, Page 17. This shows the events of development products expected this year.

We look forward to the authorities decision this year regarding the submissions of enfortumab vedotin in the U.S., EU and Japan that are introduced earlier and roxadustat that was filed in New York last year. In addition, for fezolinetant, the data of 3 Phase III studies in the U.S. and EU are pivotal studies and the 52-week data of long-term safety study will also be available within this year. Page 18. I'll introduce you the latest topic related to Rx+.

Holter electro cartography, or ECG, generally works data continuously for about 24 hours to diagnose arrhythmia, such as atrial fibrillation, but it requires a there's a lot of time for analysis and especially manpower due to the large amount of data needed to be handled, which leads to the issue of high cost. If the efficiency of this analysis can be improved, Holter ECG can be expected to be done more easily. As a result, early detection of arrhythmia and appropriate medical treatment can be possible for many patients. Currently, we are developing a highlight efficient and highly precise or accurate AI-based automatic analysis program under joint research with M. Heart Corporation.

M. Heart is a based start-up company that has already been providing Holter ECG test data analysis. This time, M. Heart succeeded in developing an AI-based efficient analytical algorithm with low computer load. And in March, it obtained the certification as a medical device program under the product name of My Holter II.

This automatic analysis program is embedded on the ECG analysis service being already conducted by M. Heart and expected to be commercialized in FY 2021. Slide 19. In this slide, I will introduce major Rx+ business-related events expected in FY 2021. In the Rx+ and support-related program, pilot marketing of new services are planned and BlueStar, which is being developed as a digital therapeutic product for diabetes management, is planned to initiate a clinical study in Japan.

In addition, for the flu resins contrast agent ASP5354, the top line results of the Phase II study will be available. Slide 20. This is about sustainability or access to health initiatives. We signed a new collaborative research agreement with the TB Alliance in March this year to identify lead compounds for the treatment of tuberculosis. Since October 2017, Astellas and the TB Alliance have conducted a joint research for exploration of new compounds for Mycobacterium tuberculosis.

In the drug research under new contracts, we aim to identify lead compounds with improved pharmacological activity pharmacokinetics and safety by utilizing multiple hit compounds obtained from the exploration research. The hit compounds under study this time have a different chemical structure from existing TB therapeutic agents, and it is likely to exhibit a different mechanism of action. And can be expected to contribute to the treatment of drug-resistant Mycobacterium tuberculosis. We haven't identified 4 activities that can utilize our strength, technologies and expertise, creating innovation, enhancing availability, strengthening health care systems and improving health literacy. And this tuberculosis initiative is one of the creating innovation activities.

ESG-related activities will form one of the strategic goals in the new corporate strategic plan to be announced on May 26. Although it does not necessarily contribute to the recent improvement in the OP margin, the core of sustainability is this access to health initiative which can be expected to have synergistic effects with the business in the mid- to long term. We will strengthen our efforts to this as one of the important management challenges, proactively promoted and will announce the progress whenever appropriate. Now Page 21. From here, I will summarize the corporate strategic plan 2018.

Page 22, please. Initiatives aiming at 3 strategic growth and corporate strategic plan 2018 have been advancing as planned over the past 3 years. We were able to build the foundation to create innovative treatments and support the company's goal. Strategic goal 1 is maximizing product value. XTANDI sales growth has exceeded original expectations and the Mirabegron sales was increased as expected.

The development status of post bulk projects will be summers in the next page. In pursuit of operational excellence, we achieved a profit improvement of approximately JPY 50 billion by implementing multiple initiatives such as prioritizing sales promotion costs and reducing global procurement costs. The results far exceeded the initial target of profit improvement of JPY 30 billion or more. Strategic goal 2 was to create value with a focus area approach. The clinical programs in the identified primary focus have progressed faster than expected.

The detail will be explained in Page 24. Strategic goal 3 was developing or challenging the Rx+ program. We have established a solid foundation for Rx+ business with building Rx+ story as the basic strategy. We have succeeded in a partnering with the various different fields of technology. The detail was introduced in the meeting held the other day.

Now Page 23. This is the summary of progress of the projects position as 6 post-poc projects over the past 3 years. Individual news has already been explained when timing was appropriate. We are very proud of these 3 years when a matched achievement was realized in the uncertainty of new drug development. Back then, the 3-year goals for FY 2018 to 2020 included additional indications for enzalutamide And the submission of enfortumab vedotin, gilteritinib and roxadustat and -- all of which were achieved.

In addition, some product developed have been approved in multiple regions. Regarding new products and expanding indications that were targeted to submit after FY 2021, one of the additional indications for gilteritinib was discontinued a from the viewpoint of futility, but other Phase III trials are proceeding successfully. Fezolinetant was in Phase II, when the corporate strategic plan 2018 was announced, and it has achieved primary point of efficacy in Phase III. Enfortumab vedotin also accumulates clinical evidence for pretreated metastatic urothelial cancers. And Phase III study of earlier indications for untreated metastatic urothelial cellular cancers and muscle invasive bladder cancer have also begun.

Now Page 24. This shows the progress of focus that we approach in these 3 years. The left shows as of May 2018 and the right is as of April of 2021. The progress is indicated in yellow. Yellow balloons indicate the name of the company we acquired in the last 3 years.

Thanks to the acquisition of Audentes, we have acquired capabilities and development programs that specialized in gene therapy. And gene therapy was added as a primary focus. In addition, with the acquisition of GMP Manufacturing Facilities, AAV, drug substance and drug products manufacturing on our own becomes postal from the phases of research to commercialization. Furthermore, we have started the construction of new production sites in the state of North Carolina. When completed, we will have the capability to supply multiple products globally.

Regarding production capacity or capabilities, Astellas Institute for Regenerative Medicine or AIRM specialized in cell therapy started operation and the new facility in Westborough, Massachuetts And this manufacturing site makes it possible for the commercial production. So as has been shown here in these 3 years, we accumulated a track record of getting into the clinical phase of all these projects. In addition to the progress of the project, the types of modality technology are increasing and the modality technology that was specialized for a single primary focus is also utilized in other primary focus for various biology and diseases. In other words, there is an organic connection between primary focus. A good example of this is that the cell therapy platform that was mainly used only for primary focus of regeneration and maintenance, a recovery of eyesight is now utilized in multiple primary focus, such as cancer immunity and mitochondria biology.

In the next slide, I would like to introduce it just briefly. Now Page 25. This slide was used at an R&D meeting last December. Following the retinal pigment epithelial cells or ASP7317 project in the clinical stage, multiple cell therapy programs are currently preparing for clinical trials in ophthalmologic disease, immune disease and cancer projects. In particular, for the cells surrounded by the yellow line on the slide, the cell differentiation protocol has already been established, and we will consider further to support GMP manufacturing.

Going forward, we will continue to further develop the cell medicine platform with a positioning AIRM Center of Excellence to expand into various disease areas. Page 26, in strategic goal 3 Rx+ program, we have strategically defined areas of focus and enriched a portfolio. There are programs such as digital therapeutics and bio electronics that have the potential to become new modality. Especially the Iota Biosciences, implantable medical device program aims start clinical trials in FY 2023. Slide 27.

Looking back on the financial side of corporate strategic plan 2018, the revenue was failed to reach FY 2017 level. Although sales of the main drivers such as -- although sales of the main drivers -- and also the new products expanded steadily in terms of the sales, domestic sales transfer and transfer of legacy products were aggressively promoted, which were not expected at the time of planning so. In addition, COVID-19 and the influence of exchange rates become the factors of not reaching the target. And also priority of research allocation was given to priority status areas such as the Audentes and new product launch. And -- on the other hand, we solely reviewed the costs that did not contribute to competitiveness and achieved a core operating margin of 20.1%, satisfying the guidance.

Given that we are able to strengthen our business foundation and aggressively invest in the future, we are confident in making greater progress toward our goal than the numbers. Now Slide 28. This is the last page. I will explain about the change of product portfolio since FY 2018 and the future direction. When the corporate Strategic Plan 2018 was announced, We explained that it will be a tough period with the bottom hit with the bottom hit in 2019 due to the fact that Tarceva and such product is increased the product introduced to the Japanese market from Western companies in the 22 [indiscernible] and reach end of product life And new product will not grow to the level to take on the business.

But in reality, extended growth was faster than expected, and are much with temporary income factors. So the very bottom didn't appear in FY 2019. Due to the disappearance of the special factors of FY '19 and the slight focusing of XTANDI's growth cards, and the influence of COVID, we did not return back to the growth trend in 2020. But as you can see on the slide, our product portfolio has changed significantly in the last 3 years. Around 2018, we relied more than 20% -- or about 22% of sales on the products whose patent had already expired.

But that proportion is expected to be around 5% in FY '20 and about 2.5% this year. On the other hand, the proportion of the new products, including XTANDI, was about 28% in FY '18, and it is planned to be about 45% in FY '20 and about 53% this fiscal year. As I -- well as I explained earlier, we are working for line extension and expanding sales area for new products. We believe that we are now fully prepared to achieve sustainable growth after having overcome difficult timing points during the 3 years of corporate Strategic Plan 2018. As shown on the right side in FY '21, we can further expand sales of this high-margin main product and improve the profit structure to aim for higher sales and profits.

Astellas is at a major turning point right now. And at the next corporate strategic plan, we will move toward a trend of mid- to long-term profit growth in a focused manner. This fiscal year, we are planning unprecedented significant dividend increase. Please interpret this as a sign of a strong confidence. And please look forward to the briefing session of the corporate strategic plan 2021 on May 26.

This is all from me. Thank you for your attention. Unidentified

Company Representative: That's all for our presentation. Next, we want to take your questions. [Operator Instructions]

Operator: [Operator Instructions] Today, our CMO, Bernie Zeiher, is attending.

when he responds to your question, simultaneous translation into Japanese will be available, but we cannot guarantee the accuracy of the translation. Thank you for understanding. Please, wait for a while. Mr. Yamaguchi from Citigroup Securities.

Hidemaru Yamaguchi: My first question, [indiscernible] and XTANDI full or forecast. Regarding purposes, it's performing well. Your forecast for the second line indication expansion in the United States. These numbers are incorporating that additional indication?
Unidentified

Company Representative: Matsui, in charge of sales and marketing is going to respond.

Yukio Matsui: Matsui speaking.

Thank you for your question. Yes, for the additional indications, we are factoring this in, in the United States. And XTANDI is going to have an strong revenue increase.

Hidemaru Yamaguchi: Including China and U.S., there's going to be a revenue increase in the initial markets. There's going to be growth in the United States as well but revenue is going to grow, right?

Yukio Matsui: Matsui again.

I'd like to comment again. Yes, you're right. In the United States, 20% growth is expected. And also in Europe and in China, as Yasukawa explained earlier, from March this year, NRDL reimbursement started for the international markets. Additional indications are included.

There is a room for further growth with this product. So we have a strong belief in this. That's why we developed this plan.

Hidemaru Yamaguchi: Second question. So increase the level of the dividend that was explained by Yasukawa-san.

And I think this is a good situation we expect that this pace of the increase of the dividend will continue. And the midterm plan that is coming 5 years. And during this period of time, there will be the growth expected, thanks to XTANDI. But what would happen after that? After a couple of years, XTANDI cliff is some point that investors would to focus. So midterm, there is a trend of increased profit and revenue.

That is quite important. But you also have to think about the next phase for the coming years. What kind of kind of counter measures would you increase would you introduce? What's your forecast? Or what's your confidence?
Unidentified

Company Representative: Thank you for the question. That is exactly what I would like to explain you next month with using a couple of slides. Today, because the audience is limited, so I'm not going to mention something new to you.

So please wait for a moment.

Hidemaru Yamaguchi: The last question, just briefly, 7317 they are ophthalmological project. The next step is a bit unclear. I believe that situation is continuing. Do you have any update on this? .

Unidentified

Company Representative: Bernie, could you explain about the update on 7317?
A –

Bernie Zeiher: Yes. This is Bernie Zeiher, I'm the Chief Medical Officer. Thank you for the question. 7317 is -- has been held due to the pandemic. The population that is targeted for this treatment is elderly.

And because it also involves transplantation of cells, there is also a need for immunosuppression. Thus, we have paused enrollment and while the pandemic was going on, and we hope to be able to resume in the -- as the vaccine has rolled out and after we've -- and as we have modified some of the immunosuppressive regimen. But the pandemic especially has taken a toll on this program because of the immunosuppression required and the patient population, which is very elderly and therefore, at risk for complications of COVID-19. Unidentified

Company Representative: Bernie, thank you very much for your presentation. 7317 this is a cell therapy flagship compound.

So for us, we are in a very struggling situation about this. And we study with the severe patients. So the target is elderly patients. So currently, considering the safety of patients, we are putting on the hold upon until the separation of pandemic -- or control of pandemic situation. At the appropriate timing of the report, if it's available, I can explain about it.

Thank you. That's all from me.

Operator: Next is Mr. Hashiguchi from Daiwa Securities,

Kazuaki Hashiguchi: Hashiguchi speaking. My first question is about the dividend.

Before it was a JPY 2 dividend increase per year. So for the time being, it was easy to predict the dividend for the time being, setting aside the future. How should I think for the future? Are you going to pay a JPY 8 dividend every time from now on? Or do you have any standard or yardstick about what did happen? And how much you're going to pay?
Unidentified

Company Representative: Regarding this question, Okamura is going to respond.

Naoki Okamura: Okamura speaking. Thank you for your question.

This time, JPY 8 dividend increase in fiscal 2021. If you look at that, you may think that we have started to do something very different. But for the future, as Yasukawa said before, when we announced our corporate strategic plan in May, what is going to happen into the future, hopefully, can be shown in a more concrete way. But what we want to say is that our capital allocation basic philosophy or plan is to give the top priority to investments to grow our business. So stable and continuous growth of dividend payment is our basic policy.

So there is no change at all in this plan. JPY 8 dividend payment increase this time. The next year, are we going back to JPY 2 again? The next year after next? Based on the fluctuation in the profit level, we don't know what is going to be the profit level. That's not really the case at all. Continuous and stable dividend increase is the policy we'd like to continue to pursue.

Kazuaki Hashiguchi: Regarding the commercial declination next fiscal year, there's a low likelihood to go back to the JPY 2 dividend payment next year. In 2021, we would pay JPY 8. In the following year, FY '22, if you go back to the JPY 2 dividend payment, it's not considered stable and continuous dividend payments. So that's not going to happen. Share buyback in the return to shareholders.

Regarding the positioning of the dividend increase and the share buybacks, according to my understanding, stable dividend increase was considered more important. Share buyback comes next according to my understanding. So more than before, you're going to place more rate on dividend increase. Are you shifting to such a thinking? If my understanding is correct.

Naoki Okamura: Okamura again.

It's not clearly stipulated anywhere. But in my mind, I have such a separation in my mind. Right now, with the acquisition of Audentes, we have loans or borrowings we are going to repay. We're still in the midst of repayment. It's difficult to generate excessive cash.

But for us, return to shareholders, we want shareholders to be with us for a long time. So shareholders going outside of -- should not be given a capital gain. Those who stay as well as stable shareholders, we'd like to return in the form of dividend that is going to be better in our view. On top of that, on the balance sheet, we have JPY 250 billion to JPY 300 billion cash we are controlling. If we have extra cash above that level, we would buy in share buyback our shares instead of dividend payments.

So that is early sequence.

Kazuaki Hashiguchi: Another question. AT132 impairment loss. So the possibility of the booking of this was strongly denied many times in the past, but you decided to book impairment loss. Why is that? What kind of changes happened since then? .

There's no change about the focus of the development, but booking impairment loss are not. This decision making itself is not strict enough or the development of policies changed? In the first half, I believe that you've explained about the details of the development of policy. So I just wonder where we should think anew about the new situation of the development of AT132?

Naoki Okamura: Okamura speaking. Well, in the past, I mentioned about no necessity of impairment loans So for this booking of impairment lost this time, I think I have to apologize in a part way. The reason of this impairment loss this time is not because of the change of the development of plan.

But for example, probability of success that was reduced to low is not something happening.

Kazuaki Hashiguchi: Then what was the change?

Naoki Okamura: As you know, AT132 dose that is via gene per colors. So in other words, according to their body weight, as absolute volume, the volume of the virus going into the body is increased. And our forecast is that, for example, HCV drug is available. In that case, cold untreated patients are treated.

And after that, there will be the spike in sales because we treat the patients according to the identification of the level of the patients. Now this AT132, this is a rare disease. There is no treatment available currently. Therefore, I myself consider that even there is a bit of the delay of the development for the cost and sales, so that is also just a bit of the delay. So basically, there is no change about the value.

But this time, 3 patients died, and the dose was reduced to low dose. So with a relatively heavier patients, to what extent this drug is possible to be used? We thought about it from the perspective of benefit and risk, and we consider that we should be conservative enough to make a decision. That is the [indiscernible] this impairment loss. For me, well, if it is possible as long as the drug is safe, because this disease has no treatment option. So I hope that this drug would be well used.

And in that perspective, now into the future, as long as the profile of the safety is well established, then I hope, really hope that this drug will be available for such patients. But in this process of the reevaluation, the target patients or that spikey part is not really exactly be benefited. Therefore, we booked this large scale of repayment loss.

Kazuaki Hashiguchi: So expected sales of the revenue of AT132, do you have any comment about that? If it's show well after the acquisition on Audentes, I think in the past, you mentioned that you came to the profit level within just a couple of years. Since the acquisition of the Audentes a, how do you feel about it?
Unidentified

Company Representative: Sorry about the microphone.

Well, in that perspective, We haven't really disclosed the sales of the peak time -- of the revenue of the peak time. But basically, the new Board, how many of them and what about the frequency of the onset of this disease amongst them. That proportion is stable. So if you consider that factor, I don't know if this is a way to say, but the de novo number of the patients will be possible to be calculated. I'm so sorry, I don't have specific number with me.

So if it is necessary, the corporate affiliates is going -- might be able to study about that. Thank

you
Operator: Mr. Sakai from Credit Suisse Securities.

Fumiyoshi Sakai: I'm Sakai from Credit Suisse. I have 2 questions about your products.

[indiscernible] first. Last year, when we announced the second quarter results, peak prediction or forecast was at what you revised to JPY 100 billion to JPY 400 billion. Not so invasive. [indiscernible] cancer, JPY 300 billion to JPY 400 billion. This time, on Page 23, if you look at the table, other solid tumor is also included.

JPY 300 to JPY 400 billion peak sales for the 3 indications above can be achieved. So you are demonstrating your determination to achieve this?
Unidentified

Company Representative: Thank you for your question. Yes, you're right. JPY 300 billion to JPY 400 billion and the top 3 on Page 23. For the other solid tumors, POC studies are being implemented right now.

So if there's a good response, we would go to a confirmatory phase. So this is pre-POC. When efficacy is expected in new tumor types, we would make an announcement. Other than urology, it's included positive launch to antigen, we are selecting certain tumor types in our studies. So rather urology, it's not limited to those areas.

Fumiyoshi Sakai: Understood. Such appears, then the way to look at it will be changed. Well, the efficacy where we can confirm the efficacy or what is the size of the market? What is the status of the market?

Kenji Yasukawa: Well, considering all factors, the project will be reevaluated and the result will be shared with you.

Fumiyoshi Sakai: Another question is just briefly. That's about roxadustat FibroGen.

As you know, FibroGen had a program with the FDA, as you know. But fortunately for you, you are not involved in the U.S. clinical studies -- study phase development. But with this matter, have you received any comments from EMA? Or regarding the approval in Europe? There is no obstacle so far? Is this understanding is right?
Unidentified

Company Representative: The Bernie is going to answer that question. But before that, Let me make a comment.

First of all, Japanese submission is going to be done based upon the Japanese data. So there is no involvement for the -- with that.

Fumiyoshi Sakai: And a European submission?
Unidentified

Company Representative: Well, we came up with our own analysis program and based upon that, the data is submitted. So this is independent from the submission in the United States. Now Bernie.

to explain about -- about the current dialogue with the EMA. Bernie, please?

Bernie Zeiher: Yes. Thank you. For roxadustat, we have a different analysis plan that was done specifically for Europe and done in close collaboration with the regulators and followed the European guidance documents. And so what we submitted to -- in Europe included all of those prespecified analyses, and we have been also providing additional post-hoc sensitivity analyses in response to questions and addressing those and working very closely with the regulatory authorities.

Right now, we believe that they have all of the data, which should enable them to come to a decision. And we -- we're very confident in the data that we provided and the entire dossier, and we look forward to hearing from the European regulators on their ultimate decision about the MAA. Thank you.

Operator: Next question JP Morgan Securities, Mr. Wakao, please.

Seiji Wakao: My first question is about XTANDI. The current potential you're assuming, it's before a corporate strategic plan, I'd like to know more. In your plan, JPY 550 billion, It's much above the JPY 400 -- JPY 40 billion to JPY 50 billion. So XTANDI is going to be a key to our growth. So what is your assumption for the peak year sales right now?

Naoki Okamura: When we explained the corporate strategic plan, please wait until next month.

Is there anything we can share right now? Let me check with Matsui first.

Yukio Matsui: Thank you for your question. Matsui speaking. Right now, as you said, we talked about JPY 400 billion to JPY 500 billion, but it's now exceeding JPY 500 billion. So in FY '26 and '27, patent will be maintained.

So at this pace -- if it's going to go at that pace, in FY '25, FY '26, We don't have clear numbers yet we can share. We can reach JPY 600 billion to JPY 700 billion. But for the details, we'd like to explain in May.

Seiji Wakao: The second question is about prices. The second line is included this time.

So a further revenue expansion is this something also we would like to expect. But the number you are showing this time is not necessarily bigger for me. So CHM profit share number is what you are showing. But SG&A and marketing cost, if those are included, this number itself might be smaller. But I just would like to know more details about the plan this time.

Kenji Yasukawa: Matsui is going to speak after me. This is Yasukawa. As has been mentioned in my presentation. In Japan, the list is September approval then NHI person negotiation and the launch. So FY '21, the contribution of this product is quite limited.

In Europe, if it's a favorable approval within this year. And it's not the sales at the same time through other worlds. So Europe as well for 2021, the contribution is far more limited. So FY '21 number is basically incurred from the United States. Based upon that, we came up with this forecast.

Please understand, and now Matsui-san?

Yukio Matsui: Matsui speaking. Just like to ask mentioned, I think that's the story, and I don't have much more to add. But in the case of the United States other than this line extension study, as you know, Pfizer's [indiscernible]. This is for the maintenance therapy after chemotherapy, that's their target. In that sense, it is quite unique positioning.

So chemotherapy and PD-1/PD-L1 usage expanded further, then we can enjoy a further bigger market. So we have such expectation in the U.S. markets, and based upon that, we came up with this forecast.

Seiji Wakao: Lastly, about fezolinetant. In the third quarter, 2-week result for SKYLIGHT 1 and 2, we were presented.

This time, 54- or 52-week data will be available. Fezolinetant data will be presented at uptime society meetings? At what timing? Could you comment on that? After 52-week data is available. . Unidentified

Company Representative: Thank you for your question, Yasukawa speaking. This is a frequently asked question since the last meeting.

The company's stance is that Just based on the efficacy data to talk about the drug, it's not the right thing. Safety and efficacy data should be available both to look at the risk-benefit balance to talk about the drugs. That's our stance. In principle, 52-week safety data should be available. Efficacy and partial safety data alone is not enough to talk about the drugs we'd like to refrain from doing so.

Naoki Okamura: May I add? Okamura speaking. And thank you for your support. puts numbers hard to look at them. For example, today, on Page 11, purchases JPY 20.1 billion for full year forecast for 2021. Well, this is going to be the revenue for Astellas.

It's complicated in Japan and Europe. FY '21, towards the end, a small amount is included as well. It's not entirely the U.S. figure, but JPY 20 billion is -- that's all coming from the United States. With XTANDI, when we pay co-promotion fees to further, it's the opposite figure.

This is the revenue we get. And out of that, we pay promotional fees. If that's deducted, we have the operating profit. So roughly speaking, this number can be doubled. Then in market sales in the United States can be calculated.

So from [indiscernible] Calendar year '21 forecast, we'll probably have a similar figure. I hope I can explain -- I was able to explain.

Operator: Nomura Securities, Mr. Kohtani.

Motoya Kohtani: Kohtani from Nomura Securities.

Can you hear me?
Unidentified

Company Representative: Yes, we can hear you, please start.

Motoya Kohtani: First question is to So this static corporate plan 2018 review is available, Page 23 other than due to the leasing study I think the others achieved flow focus area approach has been expanding. And looking at Page 27, almost all the imported one profit and EPS achieved. But telling you the truth, the stock price hasn't been really changed from FY 2018. And toward the midterm plan, as investors -- well, I think you are also not satisfied.

But as investors, what we have missed? Where would be the issue for you? And I think that you're going to talk about that in the next midterm plan announcement. But what is the difference from actual and what you would like to achieve?
Unidentified

Company Representative: Rather than complying to the market, I think the way of us communicating the information might be problematic a little bit. So we have to improve ourself as well. We would like to let you know the latest information of us as is possible. Therefore, R&D meeting was held last year and aware that we discussed only about the R&D projects.

And last month, we had the focus area meeting as well. So from now into the future, We gain -- we will gain the POC study more so that we show you the achievement. So I think that's our homework. So from now into that -- for the forecast area as well, we would like to communicate only the fact that actually happened. But gaining a new project, our new primary focus is established -- or plan to be established, such information is something we would like to actively disclose to you.

Of course, when it comes to post-POC phase, then study result will be available in the case. Whenever that happens, we would like to give you the briefing. This is going to be the -- also the topic next month. But we have the optimal design of the pipeline, and if that goes as planned, around 2025, the companies will be this way. That is something I'm planning to explain to you the next month.

You all are professional. So current revenue, current profit and the value of the pipeline, those are all taken into consideration to come up with the forecasted stock price. So that we can be helpful for you, we would like to incorporate a lot of information so that -- for the -- our next meeting next month.

Motoya Kohtani: Meaning that the information given to us is not sufficient. I think that's what you've realized.

And now and to the future, you'll share the information with us in appropriate manner?
Unidentified

Company Representative: We think that we have a certain improvement, however, on to 3 years, we are quite rigid. So up until POC, we didn't say anything. But before that, it was worse. We didn't say anything before pivotal study. That was something we thought we should have improved.

So in the past, we thought as long as we are doing in the right way, the people around us could have good understanding about us. However, now we have these new modalities. And that is many, and so the differentiation, factors, uniqueness of us or focus area characteristics such as cell therapy and gene therapy or immuno-oncology, we should clearly show the difference from other companies. That's something we would like to try.

Motoya Kohtani: So I look forward to your meeting next month.

So much information you can disclose. This is a question, it may be a difficult thing, but AT132 effects, Phase II was reported for since renewal hearing loss [indiscernible] in recognition. You had a relatively good data, but if you look at other parameters, By weekly dosing, the data was not so good. The placebo group had improvement better than you expected. But when you think about the sensor renewal hearing loss, there should be no placebo effect.

Unidentified

Company Representative: For 22, you cannot expect a lot. On this compound, you are learning a lot. So we are impressed about the information you have. On our side, it's still frequencies. It's not our company yet.

So we have shown just part of the data. So in our study, the interim analysis result was different from the previous studies. We are aware of that. So in our team, why did this happened? As you pointed out, in the placebo arm, there was a response. In the previous study, as you pointed out, in the placebo arm, no placebo effect at all.

So the study design was not so good. All the baseline patient selection was not correct. baseline data capturing could have been better any such room or patients were not accustomed to the testing at hospitals. Or the language test we hear is very difficult, particularly in the United States. Spanish people may take an English test.

With some, that's also an issue, a problem. So there are question marks to more than 10 questions. So we need to get more analysis results and data. There are other studies, which will have a conclusion this year. So looking at this, we'd like to make a comprehensive judgment.

Thank you for your detailed question. I didn't think about the Spanish. .

Motoya Kohtani: Last one, at for solid cancer, but there's something interesting. Phase I/II, blood cancer breast cancer and also cervical cancer that you've studied.

EV-202 study, this is a Phase III evaluate solid cancer. Cervical cancer is not included, breast cancer, head and neck, lung cancer included. So generally speaking, that cancer that doesn't go well is not included. Meaning that with approved cancer, it seems that there is a certain signal appeared. What do you think about it?
Unidentified

Company Representative: I don't remember the details about the data.

So the development side might be able to answer to you. So Bernie or Yasukawa-san, do you have any information about this?

Bernie Zeiher: Yes. This is Bernie. I'll try to answer your question. EV-202 picked -- we selected 6 different solid tumor types to explore.

And the selection of the tumor types was based on mainly 2 factors. One would be the neck and for expression because the ADC targets Nectin-4 do these tumor types express Nectin-4 and then unmet need or sort of the ability to really do a clinical investigation of it. And based on those criteria, we did do -- selected hormone receptor positive HER2-negative breast cancer, triple-negative breast cancer, squamous non-small cell lung cancer, non-squamous, non-small cell lung cancer, head and neck cancer and then gastric and gastroesophageal junction cancer. So that was -- those were the criteria that were used. It doesn't mean that there's not potential in other tumor types.

But again, based on those criteria, particularly around the Nectin-4 expression and the unmet need really drove the selection of the tumor types .

Operator: Morgan Stanley MUFJ Securities, Mr. Muraoka please.

Shinichiro Muraoka: I'm Muraoka from Morgan Stanley. Regarding CSP, I have a request to make.

And also, I'd like to make a confirmation. You may not be able to talk much. But your target for 2025, the operating margin, If possible, we'd like to get -- be shown the figures instead of the margin. Cooperating profit value did not increase because the stock price did not rise. You talked about the trend of the profit growth for the coming 5 years, Mirabegron, Lexiscan, but in spite of your [indiscernible], can we have a linear image? I'd like to confirm.

Unidentified

Company Representative: We hope we can meet expectations, the numerical targets. Compared to before, we'd like to -- we think we have included lots of numerical targets so you can look forward to that. As we said a few times, today, the audience is limited. We cannot share any formation. Regarding the specific numbers, please reach 1 other month.

.

Shinichiro Muraoka: Understood. One more question. The fresh then survived and announced about the increase of corporate tax. To what extent that impacts on to your performance? Or the U.S.

profit EPS point minus will be expected or this fiscal year tax might be a bit higher. So meaning that you incorporate the risk factors in it? Could you please explain about that? .

Naoki Okamura: Okamura speaking. Thank you very much for the question. I didn't study that much.

So I don't know the details about the impact to our performance. So I'm going to answer you after I study a bit more. The tax percentage looks higher, but it is just looks higher. It's not something that we have special factors to modify this tax. So please do not understand it that way.

Operator: Others may be waiting for your questions. But sorry, time is up. So we'd like to close Today's meeting here. Thank you once again for your participation today. Unidentified

Company Representative: Thank you for your taking time, and that concludes today's conference call.

You may now disconnect your lines.