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Edited Transcript of 4503.T earnings conference call or presentation 30-Jul-19 5:00am GMT

Q1 2020 Astellas Pharma Inc Earnings Call

Tokyo Aug 3, 2019 (Thomson StreetEvents) -- Edited Transcript of Astellas Pharma Inc earnings conference call or presentation Tuesday, July 30, 2019 at 5:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Chikashi Takeda

Astellas Pharma Inc. - CFO & Senior Corporate Executive

* Mike Kitagawa

Astellas Pharma Inc. - Senior VP of Development Project Management

* Yukio Matsui

Astellas Pharma Inc. - Chief Commercial Officer, President of International Commercial & Senior Corporate Executive

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Conference Call Participants

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* Akinori Ueda

Goldman Sachs Group Inc., Research Division - Equity Analyst

* Hidemaru Yamaguchi

Citigroup Inc, Research Division - MD and Analyst

* Kazuaki Hashiguchi

Daiwa Securities Co. Ltd., Research Division - Research Analyst

* Motoya Kohtani

Nomura Securities Co. Ltd., Research Division - Senior Analyst

* Shinichiro Muraoka

Morgan Stanley, Research Division - Research Analyst

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Presentation

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Chikashi Takeda, Astellas Pharma Inc. - CFO & Senior Corporate Executive [1]

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Once again, I'm Takeda. Thank you very much, indeed, for participating in this conference call today. I spend about 20 to 30 minutes to give you an overview of the financial results and explain our initiatives for sustainable growth.

Please turn to Page 4. Q1 fiscal year 2019 financial results on a core basis. Let me give you an overview. On a consolidated basis, revenues increased to JPY 334.1 billion, up 1.5% year-on-year. Core operating profit increased by 0.8% to JPY 84.7 billion. Core profit for the period was 67.1% (sic) [JPY 67.1 billion], down 4.6% year-on-year. Corporate tax rate increased from the previous year. There were one-off special items in the previous fiscal year. The corporate tax rate was low. As a result, the corporate tax rate rose year-on-year. Core operating profit increased to this level, but the higher corporate tax rate led to a decrease in the core profit for the period. Core EPS was remaining flat, minus 4.6% (sic) [minus 0.3%] year-on-year. A decrease in quarterly profit was offset by the share buybacks in the previous year.

The progress on a full year -- progress of the full year forecast is shown to the right. It looks high for both revenues and profit. But in the second quarter and beyond, there would be events to affect the sales or revenues negatively such as Vesicare generics in Europe, NHI drug price revision in Japan, and termination of Symbicort and bioproduct. And usually, there is more spending towards the second half of the year. So this is almost in line with our forecast, or there can be some upside slightly.

Slide 5. Revenue year-on-year analysis in the waterfall format. XTANDI, XOSPATA, mirabegron made a solid growth. New product in Japan, 8 brands, 7 products. As a group, they contributed to the revenue growth. On the other hand, particularly Vesicare and Tarceva in the United States due to LOE impact, there was a substantial decrease. Long-listed products such as Micardis in Japan continue to decline. An increase for major and new products was offset by the decrease including the ForEx impact, where the Japanese yen was appreciating.

Next page, Page 6. Core operating profit analysis. This is a high-level analysis year-on-year. As a result of the increased sales, gross profits also increased. SG&A costs also rose. There are 2 factors here. One is the co-promotion fees in the United States for XTANDI. As you know well, XTANDI sales in the United States are linked to this. To go up with the expansion of sales, co-promotion fees also increased.

For other SG&A costs, XOSPATA, EVENITY, new products. So we had launch expenses. And we have launch preparation expenses for enfortumab vedotin. So we allocated the management resources for the investment for growth. And the expenditure also increased. 6 post-POC projects made progress as we planned. And the investment continued to increase. Based on the focus area approach for regenerative medicine, cell therapy, cancer immunology, we are expanding investment for new areas. And moderated core operating profit increased by 1% year-on-year. We are trying to optimize the cost. And we are making investment into the future growth.

Slide 7. On a full basis. On the top, other income almost in line with the previous year. Other expenses were JPY 12.2 billion. As you can see towards the bottom of the page, mainly due to Phase III study entry of fezolinetant, fair value remeasurement on contingent consideration was booked at the time of Ogeda acquisition increased. And the fluctuations of this fair value were booked as other expenses. And we already factored the same to the full year forecast for FY '19 we announced in April. We had JPY 24.7 billion for other expenses in the previous fiscal year and JPY 12.2 billion this year, so a decrease by JPY 12.5 billion. And operating profit increased by 21.3% to JPY 77.1 billion. As I explained earlier, tax rate was low in the previous fiscal year because of one-off factors this fiscal year. It's rising compared to the previous year. Profit for the period was JPY 58.5 billion, up 7.3%. EPS increased by 12.1% year-on-year due to the positive factor of share buybacks in the previous fiscal year.

Next, our initiatives for sustainable growth, I'd like to explain from the next page and onwards. Turn to Page 9. XTANDI, XOSPATA and mirabegron sales. I'd like to give you some additional information using this page. XTANDI, JPY 96 billion, up 18%, record quarterly sales were achieved. There was a steady growth in expansion in all regions in the United States. M0 CRPC additional indication was obtained. And then the volume is continuing to increase.

XOSPATA, last year in December, in Japan and in the United States, this was launched. First quarter results were JPY 2.5 billion. In May this year, FDA approved the label update to add the OS data. There are many doctors who experienced effective responses early, so XOSPATA is well accepted. Mirabegron is also making double-digit growth. Results in the first quarter was JPY 39.9 billion. We will continue to engage in disease awareness activities. And based on mirabegron MOA, we'd like to penetrate the good balance between efficacy and tolerability. And prescription at the first-line therapy is on the rise.

Page 10. 8 brands and 7 products, these are the new products in Japan. Let me explain. Last year, compared to the previous year, year-on-year, sales are almost doubling. EVENITY, it was launched in March. JPY 3.5 billion was booked for the sales for the first quarter, more than expected. It has dual effects of increasing bone formation and decreasing bone resorption. MOA is unique and convenience is well accepted. And the number of prescription is increasing steadily. We have an expectation of this as a leading new product in Japan as a growth driver.

In July this year, we launched Smyraf as planned. This would improve early symptoms and also prevent the progression of structural damage in joints. And it's convenient because of one steady dosing. We would penetrate this product profile into the future.

Repatha, target-patient population is expanding. And this is a treatment for hypercholesteremia. In addition to the combination with statin for patients, we -- in adequate response to statin, Repatha monotherapy can be given to patients not fit for statin use.

Next page, Slide 11, our initiatives in China. First, in numbers, from April this year, we have the Greater China category to manage this region. In addition to China, we have Hong Kong and Taiwan as part of the Greater China as the region. Year-on-year, 7% increase was achieved. Excluding the ForEx impact, 14% was CER growth.

You can find the recent topics in China in the bottom half of the slide. Right now, in China or in Greater China, our core product right now is progressed in China. The number of transplant is continuing to increase in China. Prograf is a proven and reliable brand. And also there is a high awareness of this. And also, Advagraf, a modified formulation Prograf, was launched successfully. So it's making a steady progress as a growth foundation in the Chinese business. So on top of the existing products focusing on Prograf, we will add new products and accelerate growth. We will promote such strategy in China or as part of this. By the end of the current fiscal year, we plan or hope to launch XTANDI. And to prepare for the launch, as part of this, we have established the market -- oncology marketing team. In China, it's becoming more important to have digital marketing and also drug stores. So in order to reinforce this, we established a new function. We need patient disease awareness for urology and gout. And we plan to maximize the value of BETMIGA, Harnal and Feburic.

Next page, Page 12. These are our progress in 6 post-POC projects. These 6 are continuing to make steady growth. Enzalutamide, we submitted the application for the additional indication of M1 HSPC in Europe and Japan. We couldn't include this in the slide, but in Japan, we also submitted our application in Japan. In enfortumab vedotin, we are submitting our application in the United States using the accelerated approval system in the third-line patients pretreated with platinum and PD-1, PD-L1 inhibitors. Fezolinetant, we made entry into Phase III in the United States and Europe.

Slide 13. On top of those, we have some events that can be updated here today. First, gilteritinib, the top middle one, in the United States, sNDA to include OS data was approved. And for enfortumab vedotin, it is expected to report data of the cohorts in combination with pembrolizumab from EV-103 study for first-line metastatic urothelial cancer at ESMO, or European Society for Medical Oncology.

Look, roxadustat. With respect to roxadustat, we have updated the anticipated MAA submission timing in EU as we await a number of analysis to occur for the submission. The anticipated submission will come from the same integrated database expected to be used for the U.S. NDA submission. We are going to move into a review of this data towards anticipated MAA submission as quickly as possible.

Slide 14, next page, please. From here, I would like to introduce you to each individual project. Enzalutamide, the M1 HSPC patients. Targeting such patients, ITT or ENZAMET study was conducted, and that data was presented at ASCO. Enzalutamide compared to the existing NSAA, OS was significantly standard or improved. PFS is set as the primary endpoint. Enzalutamide was, compared with the placebo, within ARCHES study. So together with this data, the service center data is also going to be the supporting sNDA data.

So from here, Page 15, I would like to talk about enfortumab vedotin. As it is being introduced, the -- this is targeting the patients with platinum and PD-1/L1 inhibitor, and BLA was submitted to the FDA in July for such patients. Annually, 56,000 patients are diagnosed with mUC in U.S., Europe and Japan. So at the bottom, you can find the charts. We are aiming at the expansion of the indications. On top of the third line submitted in the United States this time, we are conducting the clinical trials for earlier-phase patients.

Slide 16. Phase II study Cohort 1 result used for the submission in the United States is explained here with using 2 slides. First, ORR, the platinum and PD-1/L1 inhibitor-pretreated patients and 2 domain options are limited. For such patients, ORR is 44%, and 2% patients achieved CR. This result was presented at ASCO and it collected so much of the attention.

Slide 17. This is the duration of response. As you see, it was 7.6 months. Most common TEAEs are described over there. Together with the treatment-related AEs of interest, OS and also time to progression data are included within the appendix, so please refer to that.

Slide 18, fezolinetant. In the Western countries, it went into the Phase III. 2 pivotal studies and 1 long-term safety study are going to be conducted. You find the study designs are for all these studies, 2 fezolinetant arms and also placebo into the 3 arms evaluated so that the most optimal benefit, the risk balance can be obtained. Based upon the consultation with the authority, those modeling -- safety and efficacy simulation were conducted. And as a result, on top of 30 milligrams, 45 milligrams which was not used to Phase II was selected.

Slide 19. Those are the major events expected within this fiscal year on top of the 6 post-POC projects. And those completed after the introduction in April, you'll find the tick indications. And within these 3 months, we've made a great progress. And we would like to make an effort to achieve the target.

Slide 20 is a focus area. Left half, with the frequency regarding the FX-322 currently in the Phase II, we came to the exclusive license agreement for development and commercialization in the World except United States. So in other words, 15% of adults is expected to have hearing loss. And out of that, 90% is due to the sensorineural hearing loss. And currently, there is no approved treatment for that. This sensorineural hearing loss is due to the loss and also the damage of the inner ear and hair cells. FX-322 activates the inner ear progenitor cells and differentiate them into hair cells so that the recovery of hearing can be achieved.

ASP3772, on the right, this is the next-generation vaccine targeting pneumococcus utilizing Affinivax preparatory MAPS technology, which is under development with Terasen. It went into Phase I/II.

Page 21, immuno-oncology and the focus area. And as part of a primary focus management, [reldesemtiv] is prioritized to be allocated. Including other mechanisms in the oncology, they are sufficient on the pipeline. So taking this opportunity, I would like to introduce you such lineup. For each product, depending on the progress level, we would like to have extra opportunities to expand. Today, outlined is just summarized within this one slide so that you can have the overall picture.

Slide 22. We have a strategic plan 2018. And there, there are 3 strategic objectives set. And a part of that -- part of those is Rx program. And we are continuously pursuing the possibility of that. And this time, asP5354 made a certain progress, so I'd like to briefly introduce that to you. ASP5354 is image-guided precision surgery. As you can find it on the left, for the lower abdominal surgery or the simple method. Ureter is visualized to improve the precision of the surgery. Based on observations completed currently, the POC study is under the preparation.

Last slide, Page -- Slide 24, that is about the capital allocation. There is no change about the policy. And with the Frequency, we have the license agreement. This is the investment for strategic business growth, and we are going to pursue such opportunities. The return to the shareholders, this is just a reminder. But once again, this period, we expect the profit/loss, but we expect the dividend of JPY 40, up JPY 2.

That's the report from me. Thank you very much for your attention.

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Unidentified Company Representative, [2]

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Thank you very much. That's all the presentation from our company. We now would like to entertain questions from the audience.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Mr. Yamaguchi from Citigroup.

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Hidemaru Yamaguchi, Citigroup Inc, Research Division - MD and Analyst [2]

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Q1 gross profit ratio for the company as a whole, it's improving. Whether the mix is improving or not, we don't know, but there is a factor because of the higher yen or the yen's appreciation. Q1 breakdown for the gross profit ratio, do you have the information?

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Chikashi Takeda, Astellas Pharma Inc. - CFO & Senior Corporate Executive [3]

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The 2 factors, as Yamaguchi-san said, one is the product mix, the other is the ForEx. Unrealized profit elimination. In this quarter, the first quarter, product mix, it was negatively for the product mix in the first quarter. But regarding the ForEx, it works positively. In total, cost ratio, 0.4 point improvement.

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Hidemaru Yamaguchi, Citigroup Inc, Research Division - MD and Analyst [4]

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Do we have any information about each of the 2, [2.0], 0.4 in total. Do you have the breakdown?

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Chikashi Takeda, Astellas Pharma Inc. - CFO & Senior Corporate Executive [5]

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The product mix 0.7% plus (inaudible) ForEx minus 1.1%. In total, 0.4% improvement.

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Hidemaru Yamaguchi, Citigroup Inc, Research Division - MD and Analyst [6]

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My second question, EVENITY, right, it's doing very well. You don't disclose the full year forecast, so we cannot really tell. Akebia, it's rising to 35 in the first quarter. Instead of the [program] with initial shipment, it's going to increase on a full year basis?

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Chikashi Takeda, Astellas Pharma Inc. - CFO & Senior Corporate Executive [7]

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Yes. Since April, it's growing steadily. So we are expecting a similar trend. We're hoping that it's going to rise in the same way.

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Hidemaru Yamaguchi, Citigroup Inc, Research Division - MD and Analyst [8]

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XTANDI hormone, I forgot the name, but that's the new submission you're making in the United States and Europe and also in Japan. The target population is going to increase. Do you have any image on that?

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Chikashi Takeda, Astellas Pharma Inc. - CFO & Senior Corporate Executive [9]

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Matsui, would you like to comment?

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Yukio Matsui, Astellas Pharma Inc. - Chief Commercial Officer, President of International Commercial & Senior Corporate Executive [10]

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In one, it does detect hormone-sensitive prostate cancer. The number in the United States, I think that's your question, right? According to estimation, evaluation in the United States, 38,000 approximately in the United States. 38,000.

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Hidemaru Yamaguchi, Citigroup Inc, Research Division - MD and Analyst [11]

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Okay. And also further, enfortumab vedotin, 56,000 new patients, you're going to start for a third line. How much of the population is going to be the target, first line and third line? Do you have any breakdown or classification among these groups?

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Chikashi Takeda, Astellas Pharma Inc. - CFO & Senior Corporate Executive [12]

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Matsui again to comment.

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Yukio Matsui, Astellas Pharma Inc. - Chief Commercial Officer, President of International Commercial & Senior Corporate Executive [13]

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By region, treatment structure is different in the United States, Europe and Japan, so we cannot generalize. But in the United States, third line, so the number is much less, like 10% in the United States or even less. But regarding this market, as you know well, there is no other alternative treatment in this area. In that sense, we hope that the drug would be approved. Then this market would expand with a new treatment option.

We're still assessing, particularly the third line. There is no treatment for the third line settings. We don't have any established data. So this is just our estimate. But this is how we see this.

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Hidemaru Yamaguchi, Citigroup Inc, Research Division - MD and Analyst [14]

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Sorry for a long time but just one more, just briefly. XOSPATA, flat [FLT3], it's about 30% FLT3, if ratio is high or low compared to your expectations?

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Chikashi Takeda, Astellas Pharma Inc. - CFO & Senior Corporate Executive [15]

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Matsui, would you like to comment?

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Yukio Matsui, Astellas Pharma Inc. - Chief Commercial Officer, President of International Commercial & Senior Corporate Executive [16]

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Yes. In the United States, regarding the assessment in the United States, it's about 30%. No change in our evaluation. For Japan, in contrast, it's lower in Japan.

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Hidemaru Yamaguchi, Citigroup Inc, Research Division - MD and Analyst [17]

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But we think there is a challenge because in Japan, what you can measure the positivity with diagnostics is just once because of the restrictions in terms of the reimbursement. At what timing doctors going to measure this? It's lower in Japan. But is this just within the area or not?

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Yukio Matsui, Astellas Pharma Inc. - Chief Commercial Officer, President of International Commercial & Senior Corporate Executive [18]

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It's difficult to judge, but there are high expectations for this drug. So as much as possible with the diagnostics, we expect to save [FLT3] patients. So we'd like to increase our awareness activities.

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Operator [19]

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Daiwa Securities, Hashiguchi -- Mr. Hashiguchi, please.

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Kazuaki Hashiguchi, Daiwa Securities Co. Ltd., Research Division - Research Analyst [20]

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Hashiguchi is my name. I have a couple of questions. First of all, XTANDI, year-on-year or quarter-on-quarter. In this quarter, the growth level looks better than the trend so far. If you also shot this thing that way as well, what kind of factors are conceivable? Could you explain mainly such factors that you think that's working? And in this term, you said the price may be reduced, whether the volume might be increased. But as this first quarter for volume-wise and price-wise, so the monetary, value-wise, what would be the other actual changes taking place?

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Chikashi Takeda, Astellas Pharma Inc. - CFO & Senior Corporate Executive [21]

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Matsui is going to answer your question.

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Yukio Matsui, Astellas Pharma Inc. - Chief Commercial Officer, President of International Commercial & Senior Corporate Executive [22]

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Especially I think you mainly focus on the U.S. market. So here, I would like to make a comment, mainly about the U.S. numbers. As you've pointed out, in the United States, quarter-on-quarter, sales value is 22%. And volume-wise, it is 10% increase. And here's big gap. As you know, in the United States, calendar year first quarter is always the quarter with a high payment for rebate. So calendar first quarter, calendar year first quarter, that is reduced in terms of the sales as a quarter.

That's why sales-wise, this calendar second quarter -- or first quarter, fiscal first quarter, full year, the monetary value-wise, 22%. So there is a bigger increase. For the volume, quarter-wise 10% year-to-year, compared to the same quarter, previous year, 12%. So the growth is quite set. Or in other words, demand is quite steadily growing, just like Takeda explained a little while ago. PROSPER M0 data has been well communicated. So only usage of this product is well accepted by the physicians. That's our way to look at the situation.

The U.S. volume, 12%, I believe you mentioned. The U.S. sales itself is 18% increasing year-on-year. So the pricing is working as a positive factor for just year-on-year trend. Price increase took place this January by 5.9%. And yes, we believe that, that impact is reflected onto this.

Your very first question, fiscal year-wise price impact. The volume increases. But the price-wise, it's in the tough situation.

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Kazuaki Hashiguchi, Daiwa Securities Co. Ltd., Research Division - Research Analyst [23]

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That was a precondition you expected. I think that, that's what I mentioned in the question.

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Yukio Matsui, Astellas Pharma Inc. - Chief Commercial Officer, President of International Commercial & Senior Corporate Executive [24]

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The price pressure, as you know, in the United States is getting more intensified data. ZYTIGA and Bio as well, the competitor is going to be launched. So our expectation or forecast is that such a pricing pressure might be further strengthened.

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Kazuaki Hashiguchi, Daiwa Securities Co. Ltd., Research Division - Research Analyst [25]

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Understood. Second, you also discussed MAA In Europe. In April, in the previous announcement, if I refer to the material at that time once again here, according to that, as of April, already all the necessary data for the submission was available. And according to your explanation here today, the information hasn't been really fully prepared. So why this change happened? And what actually changes the comment?

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Chikashi Takeda, Astellas Pharma Inc. - CFO & Senior Corporate Executive [26]

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Kitagawa will answer your question.

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Mike Kitagawa, Astellas Pharma Inc. - Senior VP of Development Project Management [27]

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For the submission, Phase III study result necessary for the submission, whether that regards -- that is completed, as it's been explained in April. But we are talking about the integrated data, including safety and efficacy. The analysis of such integrated analysis based upon the prespecified plan of the analysis, the information hasn't been fully available. So looking at such predefined data, we would like to think about the timing of the submission. And we would like to announce when it will be accordingly. So this fiscal year, fiscal year 2019, is kind of the target. And for that purpose, we would like to do preparation.

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Kazuaki Hashiguchi, Daiwa Securities Co. Ltd., Research Division - Research Analyst [28]

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You mean the timing of the availability of integrated result, that is different from what you sold in April? Or the data actually, you will receive is different from what we expected? That's why you had to change the scenario you came up with first of all?

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Mike Kitagawa, Astellas Pharma Inc. - Senior VP of Development Project Management [29]

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Well, we haven't integrate -- haven't received all the necessary integrated data. That is the answer.

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Kazuaki Hashiguchi, Daiwa Securities Co. Ltd., Research Division - Research Analyst [30]

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Okay. Focus area approach, FX-322, that you've introduced for your focus area approach. So conventionally, for focus area approach, I believe you've introduced 4 of them, but this is the fifth one. Is this understanding right? Or if my understanding is right, focus area approach is now focusing on just one product. Rather, behind, there are some more with the same technology.

So if we lead a product mix success, then afterwards, you can come up with another product, one after another. That was called as a focused product, I believe. So far, the condition of 4 products, the technology companies are already acquired. Without the acquisition, you did some partnership. But at this frequency, FX-322, according to the press release, you have a contract only with the FX-322. And now this FX-322 is included within this focused approach. Could you please explain the reason why?

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Mike Kitagawa, Astellas Pharma Inc. - Senior VP of Development Project Management [31]

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Takeda is going to answer your question.

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Chikashi Takeda, Astellas Pharma Inc. - CFO & Senior Corporate Executive [32]

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As we've mentioned, the situation is a bit different from conventionally we explained. So this is a relatively more wider scope of the originative medicine. That is where this product or the project is included. That's the foundation of this explanation this time, meaning that is like the diversification of the convention of regenerative medicine. Yes, that's the primary focus. And based upon the definition, this project can be part of that. With that perspective, we met explanation.

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Operator [33]

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Next, Mr. Kohtani from Nomura Securities.

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Motoya Kohtani, Nomura Securities Co. Ltd., Research Division - Senior Analyst [34]

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I'm Kohtani from Nomura Securities. First, XTANDI donut hole from 2019, co-payment should be 100%, but now it's 25%. Pharmaceutical companies have more burden in the first quarter in the fiscal year or the fourth quarter. There was a negative expenses that's gone in the first quarter. Is my understanding correct?

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Chikashi Takeda, Astellas Pharma Inc. - CFO & Senior Corporate Executive [35]

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Matsui, would you like to comment?

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Yukio Matsui, Astellas Pharma Inc. - Chief Commercial Officer, President of International Commercial & Senior Corporate Executive [36]

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As you said, the burden by manufacturers up until FY '18 was 50%, but it's 70%. So from January to March, there is an increase substantially for the burden by the manufacturers. In addition to that, as you know, usually, between January and March, rebates are being paid more -- or most in this period. First quarter on a calendar year basis for any product, particularly Medicare-related products, in particular, sales tend to decrease on a value basis. On top of that, as you said, between -- since January this year, that portion was rather big. And in the United States, there is a measure being discussed to curtail the healthcare expenditures. We don't know what would be the outcome or the direction. But the donut hole for the manufacturers, no change in 70% to be paid by the manufacturers right now.

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Motoya Kohtani, Nomura Securities Co. Ltd., Research Division - Senior Analyst [37]

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You may not be able to answer this, but rebate and Medicare donut hole increased payment, which was bigger? In the first quarter or the fourth quarter?

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Yukio Matsui, Astellas Pharma Inc. - Chief Commercial Officer, President of International Commercial & Senior Corporate Executive [38]

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It was extraordinarily low in the fourth quarter.

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Motoya Kohtani, Nomura Securities Co. Ltd., Research Division - Senior Analyst [39]

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Which was bigger? Can you say that?

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Yukio Matsui, Astellas Pharma Inc. - Chief Commercial Officer, President of International Commercial & Senior Corporate Executive [40]

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Regarding the first quarter, in general, the donut hole general burden is being paid by the manufacturers. Our expanded sales are higher figures for the first quarter on a calendar year basis, so you can understand this way.

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Motoya Kohtani, Nomura Securities Co. Ltd., Research Division - Senior Analyst [41]

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Okay. Next, in demand, this is different from ARCHES study docetaxel plus -- sorry, this is a comparison against docetaxel. Hazard ratio may not be so different. But I think it's great to demonstrate efficacy here. What is going to be the future positioning of docetaxel? According to the data, it's better to use it earlier to improve the prognosis, according to the data from before. But looking at this data, docetaxel, enzalutamide, it's better to use them as soon as possible. According to this, M1 HSPC, ENZAMET, depending on how to handle ENZAMET, the volume is going to increase. Competitors may not have such data. Is this going to be a very powerful evidence for you? What is going to be the potential impact of this?

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Chikashi Takeda, Astellas Pharma Inc. - CFO & Senior Corporate Executive [42]

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Kitagawa, would you like to comment?

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Mike Kitagawa, Astellas Pharma Inc. - Senior VP of Development Project Management [43]

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Regarding this data, compared to the existing data by the competitors, what is the magnitude of this data, we cannot comment in comparison to the competitor's docetaxel. This result data is now being published [daunorubicin] OS extension is very impactful in our view as well. Using this data in U.S., Japan and EU, we submitted application which is -- we consider it very significant.

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Motoya Kohtani, Nomura Securities Co. Ltd., Research Division - Senior Analyst [44]

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Looking at the details of the data, peripheral neuropathy is increasing in the enzalutamide arm. But that is not a concern -- too much of a concern for you. Most of them are Grade 1 or 2.

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Chikashi Takeda, Astellas Pharma Inc. - CFO & Senior Corporate Executive [45]

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Kitagawa, would you like to comment again?

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Mike Kitagawa, Astellas Pharma Inc. - Senior VP of Development Project Management [46]

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At ASCO, we made a presentation of our data. New England Journal Medicine, we also published the data there as well. As part of the submission, it's going to be evaluated appropriately. As of now, efficacy and safety, considering the balance, we decided to submit our file. So it's going to be a treatment offshore with an appropriate to balance in our view.

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Motoya Kohtani, Nomura Securities Co. Ltd., Research Division - Senior Analyst [47]

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Okay. And Page 20, asP3772, pneumococcal vaccine. In Japan, this is not a topic at all. But in the United States, there is the very intense [pneumococcal 13] assessed that this can be -- is going to be a $1 trillion market. Prevnar 13 is also available. It's (inaudible) and there's a very high competition. Using this product in this very competitive market, are you going to enter this competition? And the strength of this product exists. You think this is going to be very promising? Diptheria toxin to conjugate various others to manufacture their vaccine for the competitors. It's very complicated, but your [MAPS] virus is more simplified or simple. Could you explain this?

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Mike Kitagawa, Astellas Pharma Inc. - Senior VP of Development Project Management [48]

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Your approach is very simple and streamlined. Regarding what we can share right now, [MAPS] technology has a high affinity for sugar chain and protein compared to the existing vaccines. There is very high prophylactic efficacy for invasive infections and also for multiple targets. And in the first stage of infection in the nasopharyngeal colonization, it's going to reduce it. And also, the manufacturing method is very simple and streamlined. So this is what we can say at this stage in terms of the differentiation point. As we proceed with the clinical development, we'd like to clarify the data for differentiation as we proceed.

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Motoya Kohtani, Nomura Securities Co. Ltd., Research Division - Senior Analyst [49]

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Okay. And the incentive, there is no mention of that product at all in the presentation. The results of the study were available. Primary endpoint was [SCC], that was not achieved. But that result in total, 3 months, 12 weeks, 25% improvement for the cover, a 33% improvement in 6 months, it may not be sufficient. But unless 103 study results, how do you see those results? This is my last question.

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Chikashi Takeda, Astellas Pharma Inc. - CFO & Senior Corporate Executive [50]

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Kitagawa, would you like to comment?

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Mike Kitagawa, Astellas Pharma Inc. - Senior VP of Development Project Management [51]

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As I say, this data was published. Cytokinetics is a partner. Including them, what to do and how to interpret the data, we are still discussing right now. As of now, we cannot comment.

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Operator [52]

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Next person, please. Goldman Sachs, Mr. Ueda.

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Akinori Ueda, Goldman Sachs Group Inc., Research Division - Equity Analyst [53]

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Goldman Sachs, Ueda. As far as XTANDI, I have additional question. In the United States, in the urology, what's the percentage of the prescription? And the first quarter number, if that is looked region-by-region against the plan or forecast, is there any increase or decrease?

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Unidentified Company Representative, [54]

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Your first question, the U.S. urologists' prescription level. Well, usually, we talk. Last time, 3,700 urologists are prescribing this drug. But according to the latest data, the number increased to 3,900. And as has been mentioned [by many urologists] the positioning of this drug and awareness of this drug are reflecting into the prescriptions. That's how we look.

And your second question, what was that? The region-wise? Region, you mean the Europe, U.S. and Japan?

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Akinori Ueda, Goldman Sachs Group Inc., Research Division - Equity Analyst [55]

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Yes.

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Unidentified Company Representative, [56]

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Well, for each region, they are all on the expected level. In Japan, yes, on an expectation level. In the United States, it's better than our expectation. In Western Europe, especially in France, Germany and such EU 5 countries, prescription is growing. So we were able to regain additional confidence in the first quarter.

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Akinori Ueda, Goldman Sachs Group Inc., Research Division - Equity Analyst [57]

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So urologist, [Indiscernible] in the fourth quarter, 25% to 26% is the prescription rate among the urologists. Do you have such kind of data at this time?

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Unidentified Company Representative, [58]

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Percentage-wise, no change. 26% is the confirmed number.

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Akinori Ueda, Goldman Sachs Group Inc., Research Division - Equity Analyst [59]

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Second question is about Greater China. So the trend of revenue increase compared to the past couple of years, the situation or trend is the same. Or you are going to be more focused in the Greater China market? What about the timings of the product launch? Or what launches, do you think that this trend might be changed?

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Unidentified Company Representative, [60]

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In the past, China, in line with the growth of the market, 2-digit growth has been continuing. That's a fact. So 14%, excluding the ForEx impact, 14%. As the current foundation, we could say that the business is continuously expanding without any changes. And again, greater China, the new structure to be approached, and we've started the new investment as well. This is the first quarter, and investment is just started. So the platform is now under the reinforcement. The Feburic is one product and also BETMIGA. Those are what we can expect. And for those, we started to put more effort. The product, we expect the most further growth is just like Takeda explained a little while ago. Within this fiscal year, XTANDI approval and launch. That's one target. XTANDI, as you know, this is the innovative drug accepted by each country, different countries. So based upon this, in China as well, we would like to grow further.

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Akinori Ueda, Goldman Sachs Group Inc., Research Division - Equity Analyst [61]

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Last question, roxadustat, the progress in the Japanese market. So approval timing and also MACE data is currently available. So your way to look at the potential, are there any changes on that?

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Chikashi Takeda, Astellas Pharma Inc. - CFO & Senior Corporate Executive [62]

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Approval and launch expectation forecast, so far, it's in line with the plan we have. November-December launch is what we are aiming at or targeting at for our preparation. Regarding MACE data, as Kitagawa explained a little while ago, further statistical analysis have been ongoing with wider and more data is used. And based upon that, we are trying to establish the positioning of this drug, and preparation is continuously ongoing. But this drug has the innovativeness and novelty. No inferiority is also proven in the dialysis patients. So in Japan, as such in the class drug, we would like to get into this therapeutic area.

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Akinori Ueda, Goldman Sachs Group Inc., Research Division - Equity Analyst [63]

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Okay. So in Japan, the results, regardless of the timing and the result of this integrated data, you are going to follow the original plan?

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Chikashi Takeda, Astellas Pharma Inc. - CFO & Senior Corporate Executive [64]

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Yes, that is our interpretation.

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Operator [65]

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Because of the time, we'd like to take questions from one more person, and this is going to be the last question. Next, Morgan Stanley, Mr. Muraoka.

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Shinichiro Muraoka, Morgan Stanley, Research Division - Research Analyst [66]

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I'm Muraoka from Morgan Stanley. XTANDI, so it has begun earlier hormone-sensitive HSPC, 38,000 patients. Out of 38,000 patients, Zytiga a new treatment -- how many of them are receiving new treatment already?

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Chikashi Takeda, Astellas Pharma Inc. - CFO & Senior Corporate Executive [67]

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Stage by stage, the details by stage. We don't have a way to capture those data, so we cannot answer your question.

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Shinichiro Muraoka, Morgan Stanley, Research Division - Research Analyst [68]

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Okay, understood. And XOSPATA? The progress seems to be slower in the United States. And January-March was too good, so any reaction or any particular reason behind? Or can you move towards 100 million?

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Chikashi Takeda, Astellas Pharma Inc. - CFO & Senior Corporate Executive [69]

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We had a very smooth start and a steady start as we see. It was launched in December last year. It is still a young product. We have the results in the United States. And we don't have an understanding that there is a delay or more than on track, there is a progress in the United States. It's going to be used more broadly into the future, that's our expectation.

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Shinichiro Muraoka, Morgan Stanley, Research Division - Research Analyst [70]

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And regarding your pipeline, I have a last question. Enfortumab vedotin, first line, pembrolizumab combination is going to be presented at ESMO. So if -- are you talking about the results of the 103 study? That's one question. Fezolinetant Phase III dose looks smaller or lower. Why did you reduce this dose? Maybe because of the side effect, but could you explain?

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Chikashi Takeda, Astellas Pharma Inc. - CFO & Senior Corporate Executive [71]

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Thank you for the questions. Kitagawa, would you like to comment?

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Mike Kitagawa, Astellas Pharma Inc. - Senior VP of Development Project Management [72]

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First, enfortumab vedotin, first line, as you say, 103 study in combination with pembrolizumab, that data is going to be presented at ESMO at the beginning of October. Fezolinetant dose finding or dose setting, this is already published. Phase II study results were examined. And we see regulatory authorities we have discussion, and modeling and simulation was performed and good balance between safety and efficacy. For optimal dose setting, 30 milligrams and 45 milligrams was set. Spotlight 1, 2 and Spotlight 4 for long-term safety study we have initiated.

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Shinichiro Muraoka, Morgan Stanley, Research Division - Research Analyst [73]

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Phase III, 450 people in Phase III, it's not so many. We may not be able to have a P value. Based on the Phase II results, you can get statistical -- the significant difference, right?

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Chikashi Takeda, Astellas Pharma Inc. - CFO & Senior Corporate Executive [74]

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With an appropriate power, the sample size was set.

Thank you for the participation. Thank you very much for your continuous support. Thank you.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]