Eisai Co Ltd
TSE:4523
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Q1-2026 Earnings Call
AI Summary
Earnings Call on Aug 5, 2025
Strong Q1 Results: Eisai reported Q1 revenue of JPY 202.7 billion, up 7% year-on-year, with operating profit increasing 55% to JPY 20.7 billion.
Key Product Growth: The "3Ls" products—LEQEMBI, LENVIMA, and DAYVIGO—drove significant growth, with LEQEMBI showing particularly strong momentum, especially in the U.S. and China.
LEQEMBI U.S. Surge: Demand for LEQEMBI in the U.S. is expanding rapidly, with the drug holding about 75% market share despite Kisunla’s launch.
Guidance Maintained: Management did not revise full-year forecasts, but noted Q1 outperformed internal plans and may consider an upward revision if momentum continues.
SC-AI Launch Near: Preparations for the U.S. launch of LEQEMBI’s SC-AI formulation are on track, with an FDA decision expected August 31, aiming to ease patient administration and potentially cut healthcare costs.
China and Tariff Risks: LEQEMBI sales in China benefited from distributor stockpiling to mitigate tariff risks; underlying demand is still strong.
Pricing and Reimbursement: Medicare coverage for BBM testing will start January next year, and drug pricing pressures—including in Japan and potential U.S. policy changes—are being closely monitored but not seen as immediate threats.
Eisai achieved a 7% year-on-year increase in Q1 revenue, reaching JPY 202.7 billion, and a 55% rise in operating profit to JPY 20.7 billion. Growth was primarily driven by the Pharmaceutical business segment and the strong performance of key products. Efficiency improvements and structural reforms contributed to higher profitability.
LEQEMBI was the largest contributor to growth, posting significant double-digit sales increases in Japan, the U.S., and China. In the U.S., LEQEMBI maintained about 75% market share even after the launch of Kisunla and showed accelerating demand with record-high weekly sales and expanding new prescribers.
Preparations for the market launch of LEQEMBI’s subcutaneous auto-injector (SC-AI) formulation are progressing smoothly, with an FDA decision expected August 31. SC-AI is seen as a key growth driver due to its convenience for home administration and potential to reduce healthcare costs. Similar launch activities and awareness campaigns are underway in Japan and Europe.
Structural reforms and strategic R&D optimization resulted in improved cost efficiency. The R&D expense ratio dropped by about 3 points year-on-year, and SG&A expenses increased only slightly, despite proactive investments in LEQEMBI growth initiatives.
There has been notable progress in diagnostics for Alzheimer's, with the U.S. Alzheimer's Association issuing guidelines recommending BBM as a confirmatory tool. Medicare reimbursement for BBM will start in January next year, which is expected to further expand demand for LEQEMBI by facilitating diagnosis.
China saw strong LEQEMBI sales, partly due to distributor stockpiling ahead of potential tariffs. Underlying demand remains solid. In Europe, launch preparations are ongoing, with sales in Germany and early access programs in France and Spain expected to begin soon. In the UK, sales are already occurring via the private sector despite ongoing NICE negotiations.
Drug pricing pressures are evident, especially in Japan where public health technology assessment suggested LEQEMBI's value could be a fraction of its current price, but Eisai expects to meet its revenue targets despite a potential reduction. In the U.S., possible new tariffs and the proposed 'most-favored-nation' pricing policy are being monitored, but no immediate impact is expected.
LEQEMBI continues to capture the majority of the market share versus competitors like Kisunla, even after their launch. Management emphasized their product’s safety advantage regarding ARIA rates, and believes that the upcoming SC-AI formulation and real-world effectiveness data will help defend and expand their position.
[Interpreted] Thank you very much for taking your time to join the financial results presentation by Eisai Company Limited. It is now time. We would like to start the financial results presentation session for Q1 fiscal 2025. Today, it will be held in a virtual format. Please download or look at the slides for the presentation on our website. Let me introduce the presenter today, Mr. Keisuke Naito, Representative Corporate Officer, Executive Vice President, COO and Chief Growth Officer. Over to you, Mr. Naito.
[Interpreted] Thank you very much for joining us today for our earnings call for the first quarter of fiscal year 2025. I am Keisuke Naito, COO and Chief Growth Officer. With many companies reporting their earnings around the same time, we have decided to hold this conference call entirely remotely in order to take into account the burden on the participants. Let's start. This shows today's agenda. We will give you the business update and LEQEMBI and LENVIMA will be updated.
Next, during the first quarter of fiscal year 2025, revenue increased 7% year-on-year and profit increased 55%. First, the Pharmaceutical business segment expanded due to growth in, what we call, 3Ls comprising LENVIMA, LEQEMBI and lemborexant or DAYVIGO to 119% of the previous year. The efficiency improvement resulting from the structural reforms implemented since last year have contributed to this growth. LEQEMBI is making progress smoothly toward achieving the full year forecast. As pathway establishment progressed, double-digit growth was achieved in Japan, the U.S. and China compared to the previous quarter.
In the U.S., emerging surge towards demand expansion is underway and the preparations for market launch are progressing smoothly for SC-AI maintenance therapy. Launch preparations for EU are also progressing smoothly. At AAIC, a high quality and a substantial quantity of data were presented aimed at enhancing the value of LEQEMBI, which I will explain later. The U.S. Alzheimer's Association has also published clinical guidelines for confirmatory test using BBM and progress toward amyloid beta confirmatory testing is being steadily made. LENVIMA has grown by 7% based on CER. Progress toward achieving the full year forecast is proceeding smoothly.
And we have made an important progress towards maximizing patient value, receiving a favorable decision in the high-purity patent infringement lawsuit. Here is the performance update. Next. Regarding the consolidated performance for the first quarter, we have secured increased revenue and profits, while continuing proactive investment in LEQEMBI through the expansion of the pharmaceutical business, and we are making steady progress towards achieving the full year forecast. Revenue was JPY 202.7 billion, absorbing a negative impact of JPY 10.1 billion from foreign exchange rates, representing a 7% increase from the previous year.
Revenue for the Pharmaceutical business was JPY 198.4 billion with a 6% increase year-on-year due to the growth of the 3Ls. Cost of sales was JPY 42.6 billion with a cost ratio of 21%, the same as the previous year, resulting in a gross profit of JPY 160.1 billion, a 7% increase year-on-year. R&D expenses were JPY 38.8 billion, 93% of the previous year's level and accounted for 19.1% of revenue. Due to cost efficiency improvement, this ratio decreased by approximately 3 points from 22.1% in the previous year. SG&A expenses totaled JPY 100.2 billion, an increase by 1% from a year earlier, including JPY 36 billion in expenses regarding shared profit of LENVIMA paid to Merck.
As a result, operating profit reached JPY 20.7 billion, up 55% year-on-year, and the net profit reached JPY 15.3 billion, a 33% increase from the previous year. Profit for the period attributable to owners of the parent was JPY 14.5 billion, up 37% year-on-year, with all lines of profit showing increases. Both revenue and profits made good starts for fiscal year 2025. Next. Regarding the analysis of factors affecting revenue transition, the top left shows the revenue of JPY 189 billion for the first quarter of fiscal 2024. In the first quarter of fiscal 2025, as shown in the pink box on the upper right, revenue from 3Ls was JPY 120.7 billion, up 19% year-on-year. This significantly drove the expansion of the Pharmaceutical business, resulting in an increase of JPY 11.9 billion in revenue.
LEQEMBI was the biggest growth driver with an increase of JPY 16.9 billion from the previous year. DAYVIGO and LENVIMA also grew by JPY 1.6 billion and JPY 0.4 billion, respectively. As a result, revenue was JPY 202.7 billion for the first quarter of fiscal 2025, up 7% year-on-year with an increase of JPY 13.6 billion. Next. As for the breakdown of operating profit transition, revenue increased due to the growth of 3Ls, resulting in JPY 10.8 billion increase in gross profit. The R&D expense ratio to revenue decreased by 2.9 points due to the revenue growth and the cost efficiency improvements through structural reforms.
The SG&A expense ratio decreased by 3.2 points due to the revenue expansion driven by the growth of 3Ls, improvements in functional and organizational efficiency and the impact of foreign exchange fluctuations. As a result, while continuing to invest proactively in the growth of LEQEMBI, operating profit for the first quarter of fiscal 2025 increased by more than 1.5x from the previous year to JPY 20.7 billion, representing an increase of JPY 7.3 billion year-on-year. There are no changes to the consolidated financial forecast for fiscal year 2025 from the disclosure in May. Continuing from fiscal 2024, we are aiming to establish a foundation for stable earnings structure, targeting ROE of 8% in FY 2026 by enhancing operational efficiency through structural reforms and strategic optimization of R&D resource allocation. And we aim to achieve revenue of JPY 790 billion and operating profit of JPY 54.5 billion.
Next, I will explain the global business update for LEQEMBI. Global revenue of LEQEMBI for the first quarter was JPY 23.1 billion. Sales in Japan, the U.S., China and other regions all saw double-digit growth. In China, the results include onetime impact of stockpiling by distributors in response to the risk of tariffs. But even excluding that, sales grew at a double-digit rate due to expanding demand. The number of markets where submission for approval has been filed is also steadily increasing, showing steady growth as a global drug. LEQEMBI is advancing smoothly toward achieving fiscal 2025 sales forecast of JPY 76.5 billion.
Next slide, please. In the United States, there is emerging surge for demand expansion. Sales grew 20% on a constant exchange rate basis from the previous quarter. Amyloid beta tests are also increasing. BBM, blood biomarker triage, tests have grown by an average of more than 130% and the amyloid beta positivity rate has increased. The number of PET or CSF tests conducted has also increased by an average of more than 120%. We are delivering humanized messages to health care professionals, emphasizing how LEQEMBI treatment may help patients maintain who they are for longer encapsulated in a message you still can be with LEQEMBI, featuring actual patients treated with LEQEMBI and incorporating empathy and differentiation into LEQEMBI treatment.
The approval of IV maintenance treatment is confirmed to have a positive effect on LEQEMBI initial treatment. Regarding future growth factors, we launched a targeted-DTC campaign -- TV campaign, from June 9. This campaign has been highly evaluated by health care professionals for its effectiveness in encouraging early medical consultations by targeting patients who have received an early AD diagnosis. The DTC campaign is fostering the understanding of LEQEMBI treatment and encouraging a positive attitude towards treatment.
BBM clinical practice guideline was issued by the U.S. Alzheimer's Association at AAIC 2025. For the first time, the association recommends BBM as a confirmatory diagnostic tool. We anticipate that BBM will be widely adopted as a triage test and confirmatory test in the society. The PDUFA date for SC-AI maintenance treatment is set for a very close date, August 31. The introduction of easy-to-use SC-AI has made home administration possible, significantly lowering the barriers to long-term continuous administration and may enable substantial reductions in medical costs associated with intravenous infusion. Preparations are steadily underway for a swift market launch following approval.
Starting in the third quarter, we will begin an approach led by PCP specialized MRs, focusing on areas where pathways have been established through IDN to strengthen coordination with PCPs. I believe you can see that such factors are targeted-DTC, BBM, SC-AI and others are creating an emerging surge towards demand expansion for LEQEMBI and the progress towards achieving the full year sales forecast is proceeding smoothly in the United States as well. Next slide, please. The differences between IV infusion and SC-AI are summarized in the table below. Both IV infusion and SC-AI are maintenance therapies, and they start after the initial 18-month treatment period.
IV is administered once every 4 weeks, while SC is administered weekly. The administration time is 1 hour for IV and an average of 15 seconds for SC-AI with auto-injector. IV is administered by HCPs at the hospitals or infusion centers, while SC-AI is intended to be administered at home by the patient or caregiver. Some patients feel reassured by receiving LEQEMBI treatment at the medical facility. On the other hand, there are also patients whose families have to drive them long distances to the hospital for treatment. For such patients, administration at home by the patient themselves or their caregivers offers the advantage of reducing the burden of hospital visits and enhancing the efficiency of health care resources. This approach is patient-centered and the introduction of SC-AI is considered an important move towards the demand expansion phase in the United States.
Next slide, please. In Japan, progress is being made in establishing pathways and the demand continues to expand. Sales from wholesalers to medical institutions stood at 130% of the level of the previous quarter, and July saw a record high, demonstrating steady growth. Cooperation between primary care physicians and specialists is also progressing smoothly. And for patients who have undergone treatment for more than 6 months, 1,500 facilities have agreed to serve as follow-up facilities, enabling patients to receive treatment at nearby medical institutions that are more convenient for them. From the perspective of increasing the value of LEQEMBI, the significance of long-term administration has been discussed at Japan Academy of AD meetings and understanding of this has been deepened.
As for future growth drivers, preparations are underway to add a new formulation of SC-AI with a potential submission targeted for this fiscal year. Additionally, ongoing disease awareness campaigns are contributing to increased awareness of MCI and encouraging patients to seek medical consultation. Currently, the second phase of the DTC campaign is underway. We are pleased to report that progress toward achieving this fiscal year's revenue forecast is proceeding smoothly. Next slide, please. In Europe, we are planning to prepare for launch in October. In Germany, preparation to meet European approval requirement is steadily underway. For 6 months, there will be reimbursement at discretionary pricing, after which economic evaluation of formal reimbursement pricing negotiations will follow.
In France and Spain, we are preparing with the aim of starting early access program in the third quarter. In Europe as well, we will be building a pathway quickly to start contributing to patients. The other day, AAIC was held in Toronto, Canada. I would like to report to you the presentations made at AAIC. At AAIC, including SC-AI-related data, a large volume of high-quality data were presented. A 48-month long-term treatment effect, real-world data, data confirming equivalence of SI-AI -- SC-AI with IV maintenance dose and potential for safe administration at home by patients and caregivers were presented.
This is related to 48 months of continued treatment data. This showed the suppression of deterioration of dementia in this population, together with Clarity AD population as for the treatment effects comparison was made to the natural course of AD shown by ADNI and BioFINDER in addition to Clarity AD population. At 18 months, difference with ADNI was 0.52 and with BioFINDER 0.57 with -- but difference was 1.75 and 2.17, respectively, at 48 months. From these results, after 48 months of treatment in Early AD, the same benefits were shown. Case reports of 178 patients with Early AD from 9 medical institutions in the U.S. were reported. Disease stage, age, ApoEe4 status, et cetera, of 178 patients were shown to be similar to clinical trials.
At the time of the case reports, 87.4% were continuing treatment. Average treatment duration was 375 days. A-beta diagnosis was mainly given with PET or CSF, but BBM was also used. In the U.S., BBM test use is doubling every 4 to 8 months. In particular, the use of p-tau217 is accelerating and the use of BBM is increasing. 84% of patients did not progress to the next stage, thus very favorable results were obtained. As for adverse events, ARIA-E or ARIA-H incidence was 13% infusion-related reactions, 3%. There were no reports of deaths or serious bleeding events.
Satisfaction with LEQEMBI treatment was high. Physician satisfaction was 8.7 out of 10. Patient satisfaction was 8.8. HCP -- caregiver 8.2 and HCPs 8.7. Two-year real-world data highlighted the favorable evaluation of lecanemab's efficacy and satisfaction of stakeholders. SC-AI maintenance treatment, FDA PDUFA action date of August 31 is fast approaching using modeling and simulation approach. Appropriateness of 360-milligram weekly dosing for SC-AI maintenance treatment was confirmed, while equivalence with IV maintenance treatment was also confirmed. In human factor study, safe and effective use of SC-AI under development in expected use environment was examined.
SC-AI maintenance dosing appropriateness was confirmed based on clinical efficacy shown by CDR-SB, amyloid PET and progression-predicting blood biomarkers. Regarding confirmation of equivalency with IV maintenance treatment, after 18 months of IV initial treatment, 10 milligram per kilogram monthly IV maintenance treatment and 360-milligram weekly SC-AI maintenance treatment showed similar PK/PD profiles and favorable safety profiles. In human factor study, which examines human behavioral and cognitive characteristics, safe and appropriate administration of SC-AI by caregivers, patients and HCPs were confirmed, supporting safe and effective administration.
Based on these results, SC-AI maintenance treatment showed equivalence to IV maintenance treatment, human factor study supported administration by patients or caregivers in nursing homes or at home. SC-AI maintenance treatment is expected to bring benefits such as reduction of overall health care system cost. Results of ARIA incidence rates between lecanemab and donanemab in indirect treatment comparison were presented at AAIC 2025. This study conducted indirect treatment comparisons using comparison with placebo of each drug, which is -- where placebo was the common comparator to understand safety differences between lecanemab and donanemab, such as ARIA outcomes and death.
Results using Clarity AD and TRAILBLAZER-ALZ 2 are that the more towards left, the more favorable the results are for lecanemab. In comparison to donanemab, the results indicated that lecanemab has a lower risk of ARIA events. Using modified titration of donanemab, results indicated numerically lower risk for lecanemab in all ARIA, ARIA-E and ARIA-H. This network meta-analysis supports the indirect treatment comparisons using original dosing schedule of donanemab and supports conclusion that in patients treated with lecanemab in comparison to those treated with donanemab, ARIA incidence is lower.
In ARIA comparison, once again, it was indicated that ARIA incidence is lower in lecanemab in comparison to donanemab, showing advantage in safety as well. I will now go over the progress towards implementation and wider usage of BBM for A-beta confirmatory test. On May 16, U.S. FDA granted IVD clearance for Fujirebio's Lumipulse G, leading clinical laboratory companies in the U.S. have adopted it and started its use in June. There is also development towards reimbursement in the U.S. U.S. Alzheimer's Association announced BBM clinical practice guideline. Looking at this guideline for one thing, BBM criteria are clearly defined. And if criteria as confirmatory testing is met, replacement of PET or CSF is possible. This is quite significant.
The recommendations of the guideline are that BBM tests with 90% or greater sensitivity and 75% or greater specificity can be used as a triaging test and that BBM tests with 90% or greater sensitivity and specificity can serve as a substitute for amyloid PET imaging or CSF AD biomarker testing. The development speed of BBM and the evolution of diagnostic paradigms are taken into consideration in encouraging clinicians to stay informed about emerging paradigms such as biomarker combinations or ratios and multi-threshold testing that may further refine the diagnostic accuracy of BBM.
A-beta confirmation by A-beta PET and CSF may be replaced with simple BBM and accelerated social implementation of BBM can be expected, leading to streamlining and expanding of the capacity of pathway. The use of BBM in confirmatory testing as expected, to be -- is expected to be a major driver to expand demand. This is the summary. In 48 months of continued treatment, treatment efficacy continues to expand compared with the natural course of AD and improvement was shown in 56% of patients with low tau. With 2-year real-world data after an average treatment period of more than 1 year, it was confirmed that about 84% did not progress to the next stage of the disease.
High evaluation and satisfaction with efficacy were also confirmed. Concerning SC-AI maintenance treatment, modeling and simulation confirmed equivalents to IV maintenance treatment in terms of exposure, clinical efficacy and biomarkers. Appropriateness of administration by patients and caregivers at home or nursing home was indicated. Significant benefits are expected, including cost reductions in the entire medical system, streamlining and increasing the capacity of treatment pathway. ARIA comparison through indirect treatment comparison indicated that lecanemab has a lower risk of ARIA events compared to donanemab. A-beta confirmatory test using BBM is showing steady progress towards social implementation and wider usage. Hence, significant benefits are expected, including cost reduction in the entire medical system and streamlining and increasing of the capacity of treatment pathway. Preclinical AD AHEAD 3-45 is progressing steadily towards obtaining top line results in 2028.
Now moving on to update on LENVIMA. Q1 global revenue from LENVIMA was JPY 83.9 billion. In the U.S., the biggest market, steady progress at 104% year-on-year growth on constant exchange rate basis was achieved despite impact from IRA. LENVIMA maintains top market share in renal cell carcinoma and endometrial carcinoma and top market share among TKIs in HCC and thyroid cancer. In terms of sustained value creation, Eisai received a favorable decision in high-purity patent lawsuit, making significant progress toward LOE extension. Our IP strategy contributed to maximization of value for patients.
In China, LENVIMA combination therapy with TACE and KEYTRUDA was approved, and Eisai is striving to make new contributions to the world's largest HCC market. We are making steady progress towards achieving global fiscal 2025 revenue forecast of JPY 312 billion. This is the summary of what I have presented today. Once again, I would like to point out that a surge for demand expansion and margin for LEQEMBI treatment at AAIC, 48-month continued treatment results and 2-year real-world data were presented. For SC-AI maintenance treatment, August 31 FDA action date is approaching. Our efforts to strongly appeal unique value that only LEQEMBI can offer is appearing in outcomes.
I myself have felt the enthusiasm about and expectations for LEQEMBI treatment from KOLs at AAIC in Toronto firsthand. Eisai is now at a turning point through -- that is how I feel. And through these efforts, we expect to cause a major paradigm shift. The initiatives that I've described today are shown here and through these, we expect the change in revenues and profits towards achieving 8% return on equity in fiscal 2026.
Now we would like to have a Q&A session. We would like to receive questions first from analysts and then we would like to follow that session with Q&A session with media.
[Interpreted] [Operator Instructions] The first question is from Mr. Wakao from JPMorgan. Can you hear me, Mr. Wakao?
[Interpreted] Yes, this is Wakao speaking of JPMorgan. Regarding the first quarter progress when compared to the internal plan, LEQEMBI, China, excluding the onetime impact of China LEQEMBI business, but I think that the progress for the first quarter has been faster than original plan. If that is correct, in what area of business the progress has been faster than the original pace? And if the same pace continues into the second quarter, do you think that there will be a chance for you to revise the full year forecast?
[Interpreted] Mr. Iike is going to respond to your question.
[Interpreted] Thank you very much for your question. This is Iike speaking. Thank you for your question, Mr. Wakao. Regarding the actual results for the first quarter, we've seen to be above the internal plan -- exceeding the plan. The major factors are due to the 3 global major products. Namely LENVIMA, LEQEMBI and DAYVIGO in each region have grown and exceeded the plan. That was the major factor. Regarding the advanced delivery of LEQEMBI products, that impact in China is excluded. Still, we saw the driving growth. And there was some delay of the expenditure in R&D activities.
But in combination with SG&A expenses, we have been working on the structural reforms from last fiscal year and in order to enhance the efficiency of expenditures in R&D that have been bearing fruits. If this cadence continues into the second quarter, which we would like to see, but the upside revision may be considered at such time. So we do not intend to make any revision to the current plan at this moment.
[Interpreted] Understood. And compared to this fiscal year's plan, I think that there was a plan to account for the onetime revenue. Do you think that there is no change to that?
[Interpreted] Yes, your understanding is correct.
[Interpreted] My second question is related to the trend of LEQEMBI business in the United States. For April through June, the full basis results were much better than our expectation. I would like to ask you to explain the background for that. On Page 10, BBM and other measures and initiatives were explained. But other than that, compared to the past quarters during the current quarter under review, what changes have you seen? And competition for share of the market with donanemab, what is the current status?
[Interpreted] Yes. For your question, Mr. Haruna is going to respond.
[Interpreted] Thank you very much for your question. I am in-charge of LEQEMBI business in the United States. My name is Haruna. Regarding the share with the competitors based upon the file data and making adjustments to the dosing frequency and the doses of LEQEMBI and Kisunla and based upon the calculated share, LEQEMBI takes about 75% of the market and Kisunla having 25%. Actually, the launch -- Kisunla was launched and compared to the last quarter, LEQEMBI could achieve double-digit growth. And on the constant exchange rate basis, 120% growth was recorded. Therefore, the launch of Kisunla has not slowed down the growth of LEQEMBI and AD market itself has been expanding because of the advancement of BBM and other diagnostic tools.
The market itself has continued to grow. Since the launch of LEQEMBI, 18 months have passed, and there are increasing number of patients, who are transitioning to the maintenance treatment. The great majority of our patients are wishing to be transitioning to the maintenance. And AD is a life-threatening and chronic disease and early start of the treatment as well as the continuous long-term administration are being regarded as significant. So that has contributed to the continued growth.
Earlier, our COO, Mr. Naito, reported on what was presented at AAIC and the 48 months long-term administration data was presented, particularly for early-stage low tau patient groups over the past 4 years, more than half of the patients have shown improvement. Therefore, in the actual clinical setting, the significance of LEQEMBI long-term administration has been demonstrated. Therefore, maintenance treatment as well as the benefit of SC-AI for LEQEMBI are being approved so that we'll be able to continue to grow in the third quarter onward.
[Interpreted] Comparing the last -- the fourth quarter of FY '24 and the first quarter of FY '25, do you think there has been any change because the growth seems to be much stronger, and we are still in the early August. Have you seen any change in the trend since then?
[Interpreted] Again, Haruna is going to respond.
[Interpreted] One piece of information for your reference regarding the quarter from April through June, there has been increasing number of new prescribers, particularly such new prescribers compared to the last term has shown a double-digit growth, of which about 70% of them new prescribers are the ones who are prescribing the drug at the newly opened accounts. So the prescription expansion is increasing during the quarter under review.
And for the past 1 month, July, because we have just entered August, and we have seen such continued trend based on the weekly sales data based on the demand, last week -- the demand was shown to be record high last week. So it is obvious that we have been saying that there has been an emerging surge. Such emerging surge is continuing throughout the month of July, also into August.
[Interpreted] Just one last question. Regarding the U.S. situation?
[Interpreted] Mr. Iike would like to supplement our answer.
[Interpreted] Thank you. This is Iike speaking, Mr. Wakao. Regarding the LEQEMBI in the United States, Mr. Haruna responded to your question, but I forgot to tell you in the outset, LEQEMBI in the United States for the first quarter of FY '25 exceeded the internal plan. So that is what I wanted to supplement.
[Interpreted] Yes, understood. Lastly, just one simple question. Regarding BBM, there has been a guideline issued for that for the confirmatory test. And what about the timing of Medicare coverage? This is my last question.
[Interpreted] Mr. Haruna is also responding to this question as well.
[Interpreted] Thank you very much for your question. For BBM pricing recommendation has been already prepared. So that will be applicable from January next year. Reimbursement will be started from that timing onward.
[Interpreted] Next, from Citigroup, Mr. Yamaguchi, please.
[Interpreted] I have a few -- I've received a few updates regarding Europe. As for insurance, it seems that the views are critical. In the U.K., has there been any progress in negotiations?
[Interpreted] Mr. Iike is going to respond.
[Interpreted] Thank you, Mr. Yamaguchi, for that question. In U.K. it wasn't as expected regarding the -- regarding NICE, but we have been -- we have continued to engage in negotiations. There are further developments, we would like to update you. Amongst the private sector, there may be foundations. And even without coverage, sales may start. But rather than that, are you going to wait until negotiations are finished or with NICE? In the U.K., it is already sold by private sector.
[Interpreted] I also have a question regarding Page 11 between IV and SC, Medicare will change. It is going to be after August 31. But from B to D -- Part B to Part D, are you prepared to support this transition of reimbursement from Part B to Part D?
[Interpreted] Mr. Haruna is going to respond.
[Interpreted] Thank you for your question. This is Haruna speaking. As you rightly pointed out, SC-AI will be covered by Medicare Part B and Medicare Part D is provided by private sector insurers. And depending on their insurance program, they have their own formulary list and CMS will review the formulary list and approved. Usually, for product that is launched outside of the cycle of Medicare Part D bidding, it will be delivered through medical exception process usually and this process is initiated by health care professional or health care staff. And this medical exception process is a process that is generally used in other therapeutic areas such as diabetes. This is a very general process.
To support such process, LEQEMBI companion -- what we call LEQEMBI Companion, this is our service team and there are account managers who support reimbursement through these services. Transition from Medicare Part B to Medicare Part D patients who will be transitioning for maintenance treatment will be supported from the launch -- the day of the launch of SC-AI.
[Interpreted] Next, Mr. Muraoka of Morgan Stanley.
[Interpreted] This is Muraoka of Morgan Stanley speaking. Regarding the transition from Part B to Part D, as a follow-up question on the earlier question, pen was launched by another company, but they were struggling in the switching from B to D regarding the injection formulation. That has been mentioned over the past several quarters. For your case, this process, do you think that it will take some time at some point in the transition? Or considering the demand for SC-AI, do you think that there will be a smooth acceleration, for example, starting from the October, December quarter? Is this somewhat the perception that we should have? What kind of dynamics do you have in your mind?
[Interpreted] For your question, Mr. Haruna is going to respond.
[Interpreted] Thank you very much for your question. Regarding SC-AI, the level of expectation toward SC-AI is very high. As COO, Mr. Naito mentioned at the AAIC meeting, the presentations were explained. There was a high attention from physicians, who often mentioned as the key factor for change. And I believe that this represents the very high expectation level from physicians and others to this therapy.
On the other hand, regarding the Medicare Part D insurance process, it is something that we have to go through. So we have to securely go through this process. And also, this is going to be a maintenance treatment. Therefore, after 18 months of initial treatment is completed and the patients, who complete initial treatment, will transition to the maintenance treatment gradually. And SC-AI initiation -- once SC-AI initiation therapy is approved and launched, and there will be another surge.
[Interpreted] Let me clarify again. From B to D, in that switch process, you may struggle and you won't be able to achieve the expected growth in the first quarter or second quarter. We won't be able to feel much such a strong growth. What do you think that instantaneously or quickly, you will be able to see the growth as expected?
[Interpreted] For your question, Mr. Haruna is going to respond.
[Interpreted] Thank you very much for your question. Regarding the switch from medical -- Medicare Part B to Medicare Part D, we have a dedicated expert team, and we are preparing for a system to support patients and switch. So we do not have any concern regarding this issue. We will be ready to go through this process in order to deliver the therapies to health care professionals and patients.
On the other hand, eligible patients for SC-AI treatment is those who have finished the initial treatment. Therefore, we believe that the number of patients eligible for SC-AI is going to increase gradually.
[Interpreted] After finishing the 18 months initial treatment, at the end of August, how many of such patients will there be? Do you think that it will reach 10,000?
[Interpreted] Mr. Haruna is going to respond.
[Interpreted] Thank you for your question. Regarding the number of patients, we do not disclose the number of patients currently. So we would like to refrain from making comments on that. But I would say that at the next earnings call, we would like to give you more clearer update on SC-AI penetration. Thank you very much.
[Interpreted] Regarding the 2086 narcolepsy treatment at World Sleep, I believe that you are scheduled to make presentation. And Takeda's profile is becoming clearer. And currently, as far as you have information and as -- what do you think is the differentiating factor as the latecomer?
[Interpreted] Mr. Ido is going to respond.
[Interpreted] I am Ido, in-charge of R&D. I am going to respond to your question. As you pointed out, at World Sleep, there will be oral presentation to be made on our data. We would like to present our detailed data then. Currently, this drug is going to be administered daily -- once daily. And also PK profile for this type of a drug is going to be very important, but this drug has an ideal profile.
That is to say, during the day, the awakeness will be maintained, and this will not have a carryover effect. And on top of that, based upon the results, MT1 type 1 and type 2 as well will be covered by this drug. Therefore, we have a high expectation, and I hope that we'll be able to present that data at that time.
[Interpreted] Next Mr. Tony Ren from Macquarie.
Okay. Perfect. So a couple of questions on LEQEMBI. Congrats, very strong results. On Slide #16, you guys showed real-world data where the incidence of ARIA is roughly 13%, right? Compared to the Clarity AD trial, there you have 21.3% ARIA incidence. So this is much, much lower. So any reason why is it so much lower in the real-world setting? Is it just because of -- it's a very small number of 178 patients?
[Interpreted] Mr. Toyosaki will respond to your question.
[Interpreted] Thank you for your question. I'm responsible for medical affairs in the United States. My name is Toyosaki. Thank you very much for your question on ARIA. About ARIA-E and ARIA-H incidence in comparison to Clarity AD, real-world data is at a lower level. This is not only 5-year real-world evidence, but according to presentations by other doctors from other centers, the incidence level is similar to Clarity AD or lower.
Are there any specific reasons that the level is lower, though were not discussed in the presentations, but the impression of the physicians in their daily practice is such that in comparison to strictly centrally evaluated Clarity AD results, and this may differ from center to center, but ARIA-E, ARIA-H incidence is not seen as problematic in the real-world setting. And I believe that physicians are adequately managing and controlling robustly in the actual clinical setting. Going forward, about the adequate control of adverse events, we would like to continue to make thorough efforts. Thank you for your question.
Yes. Perhaps just a quick follow-up on your advantage on Slide 18. Your advantage against Eli Lilly's Kisunla when it comes to ARIA. The data, the advantage is assuming Kisunla dosed using the original schedule. You know that Kisunla is now being dosed at a more gradual titration schedule. Do you think you can maintain your ARIA advantage over Kisunla with their new slower dosing schedule?
[Interpreted] Mr. Toyosaki will once again respond to your question.
[Interpreted] Thank you for your question. Regarding ARIA incidence, together with efficacy for patients who receive treatment, ARIA incidence is a very important information as we believe. And at AAIC in the TRAILBLAZER study -- in addition to standard dosing in TRAILBLAZER study and also modified titration dosing in TRAILBLAZER-6 study, in comparison to these advantage of LEQEMBI is shown. And as indicated on this page, in modified titration dosing -- in comparison to modified titration dosing, ARIA risk numerically is lower for LEQEMBI. And as for ARIA-E incidence, the advantage of LEQEMBI, even in comparison with a modified titration, we believe, can be maintained.
That's certainly very reassuring. If I could just add a quick question on Slide #28 for your China LEQEMBI sales, right? Because of your inventory building there. So it looks like you're only looking to sell another JPY 1.8 billion worth of LEQEMBI in China. I just want to confirm my understanding is correct. This looks fairly low number for the rest of the year, 3 quarters.
[Interpreted] That question will be addressed by Ms. Sasaki.
[Interpreted] Thank you for your question. I'm responsible for China. I am Sasaki. Right now, in China, very smoothly, prescription is increasing and number of new patients is increasing according to the plan. That is the situation. And as for the number that is shown today, we believe that this is transient to avoid tariff risk. Distributors are building up inventory. So this number in comparison to plan is very showing good progress vis-a-vis the plan.
[Interpreted] Next from UBS Securities, Mr. Sakai.
[Interpreted] Yes. This is Sakai of UBS Securities speaking. I have 2 questions. It's a qualitative question. Eli Lilly is somewhat forcing the same substance, donanemab. Presymptomatic AD is targeted in their clinical trial, which has been started in early next year. Interim results -- analysis results will become available. And Roche is doing -- conducting Brainshuttle. And for your LEQEMBI, the commercial strategy in the United States, in particular, do you think there will be any impact on that?
I don't think there are any measures that you are taking because they have not launched yet. So you may have various ideas. So that if you can share with us such ideas, that would be very helpful. That is my first question.
[Interpreted] Dr. Lynn Kramer is going to respond.
Yes. Thank you for the question. I'm the Chief Clinical Officer. Of course, your question is focused on the preclinical AD indication. We have our AHEAD 3-45 study, and that is a protocol that has been agreed with the FDA and can truly evaluate preclinical AD. And we're confident that by removing both protofibrils and plaque when present, we will have a positive result. However, there are differences in the trials from donanemab, in which 1/3 of the patients have global CDRs of 0.5, which is MCI. While in our AHEAD 3-45 trial, there are no patients with CDR sum of -- global CDR higher than 0. So all patients in the trial are actually preclinical AD.
And we believe that, that will be a critical impact in the results of the trial. We have somewhat different endpoints. Their endpoints are looking at conversion to the next stage. We have a primary endpoint of PACC5, which we believe is a more sensitive endpoint and also secondary endpoints that are focused on change to the next stage of disease. So we believe that our study more accurately represents the preclinical population and our results, we expect to be robust. Thank you.
Just a follow-up. You said preclinical, really talking about presymptomatic. Are there any big difference between 2 definitions?
No, that's the same. So the -- well, obviously, if you have a CDR global of 0.5, you are not presymptomatic. You are symptomatic, and that's the definition of MCI. The preclinical means that the patient has no cognitive impairment and has either intermediate amyloid, which means it's building up or elevated just as in the Clarity AD trial, but no symptoms. So there's a difference in the 2 studies in what is being evaluated. People with symptoms already are covered by the existing label for both drugs. So their study is somewhat different than ours in the population they're studying. Is that clear?
Yes. Just one more. The biomarker, you setting up any biomarker presymptomatic or preclinical patient?
Yes. Many, many biomarkers are being evaluated just as they were in Clarity AD. And that are many of the standard biomarkers such as p-tau217, the Abeta42/40 ratio. We'll also be looking at our biomarker MTBR-tau243, neurogranin and many, many.
Okay. So you have identified biomarkers already?
Yes, many and in the protocol.
[Interpreted] Regarding the -- there is a follow-up response from Mr. Ido. Regarding the Brainshuttle antibody, trontinemab. Ido is going to respond.
[Interpreted] Regarding the trontinemab, this is an amyloid antibody with the combination -- or binding of a Brainshuttle. The creation of this antibody drug is -- what is most important is the toxic core. What is going to be captured by this antibody is very important. So it's not about how much antibodies can transition into the brain, how quickly. And the trontinemab session was held with 4 oral presentations in the AAIC. Regarding the data for the cognitive function, there was no presentation on that.
And this time, the plan for Phase III study was presented as well. But regarding the steroid for infusion reaction may be required and the exclusion criteria includes the exclusion of the patients with over 5 microhemorrhages. So that means that unless ARIA incidence become 0, MRI monitoring will continue to be conducted. That means that the pathway needs to be established from scratch. Until this drug is approved, LEQEMBI would have had accumulated real-world data over 5 or 6 years.
At such time, shortly, SC-AI use will be started and the Phase III trontinemab -- according to the plan of the Phase III trial of trontinemab, there was no specific mention, but it described IV or equivalent to IV and the preclinical indication may become available at such time. Therefore, we do not believe that the position of LEQEMBI will be swayed by the launch of this drug.
[Interpreted] I'm sorry. regarding the commercial strategy of LEQEMBI in the United States. Currently, how much of the percentage of PCPs who are already using the LEQEMBI. Because once they started to use this treatment, there will be repercussions and it may become more difficult for them to manage ARIA.
[Interpreted] For your question, Mr. Haruna is going to respond.
[Interpreted] Thank you very much for your question. This is Haruna speaking. Regarding PCPs, account for about 10% of all the prescribers and the PCPs are introducing LEQEMBI treatment on themselves. On the other hand, among PCPs for -- there are many patients with MCI or Early AD being seen by PCPs. So not only starting LEQEMBI treatment on themselves, but they are referring patients to IDN where there are specialists available, and that will become important.
As we introduced today, starting from the third quarter, PCP specialized MRs will be assigned and -- so that they will be able to provide information on LEQEMBI as well as promote referrals of PCPs patients to specialists, neurologists at IDNs. So these will be pursued. Therefore, the activities targeting PCPs will be further enhanced. Thank you for your question.
[Interpreted] Next, Ms. Sogi from Bernstein, please.
[Interpreted] The other day in Japan, Chuikyo determination of drug price of LEQEMBI, that is the question, cost-benefit analysis. And according to that, LEQEMBI's value should be 1/3 to 1/4 of the current prices. That is the view shown by Chuikyo. What is the background of this? What is the data analysis that led to determination of LEQEMBI value being 1/3 to 1/4 of its current price?
And 15% drug price reduction may be imminent according to my understanding, but what is the timing of actual price reduction? And 1/3 to 1/4 together with that determination, will drug price be lowered quite dramatically rapidly.
[Interpreted] Mr. Yusa will respond to your question.
[Interpreted] Thank you for your question. I am Yusa, responsible for Japan business. As you pointed out, this time, HTA -- regarding HTA, first, there were various news reports. In a medical setting, we are hearing from physicians and health care professionals, and we are responding to their inquiries. As for their inquiries, the background of HTA, for example, the difference between companies' analysis and public analysis are thoroughly explained to physicians and HCPs. And currently, we are not seeing any negative response from health professionals.
It is called cost benefit analysis, but only clinical trial data is used, not real-world data is reflected. The major difference between company analysis and public analysis, we have issued a press release. And for one thing, in company analysis, AD pathology is taken into account. And beyond 18 months, treatment continues and the effect of that treatment continues. That is the assumption for our analysis. And in HTA, turning to the last part of your question, public analysis assumes that the administration stops but we expect treatment beyond 18 months in our analysis. But on the other hand, in the public analysis, the treatment period is limited to 18 months.
And after 18 months, public analysis assumes that there is no effect of LEQEMBI after 18 months. These are major differences. And in our company analysis, caregivers QOL is directly reflected. But in public analysis, the care burden only is taken into account and only part of that difference is reflected. And looking at these differences, the model used in the analysis included the analysis is carried out in a completely different way, and that has led to the results of HTA.
So 1/4 of the value, that is not completely our view, not at all. And we expect that there will be formal decision on drug price revision and the effective date, we expect, will be announced eventually. We are already making estimates of that impact on our fiscal '25 revenue, but we consider that there will be no problem in achieving full year JPY 24 billion revenue, and we will continue to make thorough preparations to respond to such impact.
[Interpreted] I have a follow-up question. Regarding public analysis, I don't think it is persuasive for Eisai. But under Japanese system, is it possible to challenge public analysis?
[Interpreted] Once again, Mr. Yusa will respond.
[Interpreted] Thank you for your question. Regarding that point -- regarding the deliberations of Chuikyo, we have been engaged in exchange with the authority on the analysis. Going forward, we will continue to communicate the value of this drug seizing various opportunities, including by citing data from actual clinical setting and various other data to inform the public of the value of LEQEMBI.
[Interpreted] I have one more question. As for the view expressed by Chuikyo, is there any inquiries from overseas payers about the views expressed by Chuikyo?
[Interpreted] Thank you for your question. None so far.
[Interpreted] In the interest of time, we would like to move on to the Q&A session for the media. [Operator Instructions]. From Nikkei Shimbun, [ Banu-san ].
[Interpreted] Yes, this is Banu speaking -- Ms. Banu from Nikkei Newspaper. I would like to ask about the tariff and MFN, most-favored-nation, treatment by the United States. Regarding the tariff, I believe there are uncertain points, but there may be a 200% tariff maybe imposed on pharmaceuticals. And what kind of impact do you see on the performance for this fiscal year? What kind of measures are you taking currently?
And regarding MFN treatment, which was announced the other day, and this does not include Japanese companies yet, but I wonder what will happen? And now Biogen or the Eisai U.S., and I would like to know whether you have been engaging with the U.S. administration? If that system is introduced, what kind of potential impact on your performance?
[Interpreted] For your question regarding the tariff part, Mr. Iike is going to respond.
[Interpreted] Thank you very much for your question. This is Iike speaking. Regarding the tariff to be imposed by the U.S., still, we do not have a specific and the timing when such new tariffs will be imposed are not clear yet. On the other hand, as we reported to you earlier, the inventory and supply chain in the United States have been enhanced, in order to minimize the impact of tariffs if and when tariffs are imposed. And that is my response to your question about the tariff.
And Mr. Yasuno is going to respond to your question about MFN.
[Interpreted] Regarding your question about MFN, Mr. Yasuno is going to respond.
[Interpreted] Thank you very much. I am in-charge of U.S. business. This is Yasuno speaking. Regarding most-favored-nation pricing for pharmaceutical products, that has been already known to you because letters have been sent to 17 pharmaceutical companies in the West -- in Europe and the U.S. by Trump -- President Trump on July 31. And let me share with you the 4 conditions for that.
And MFN pricing should be -- shall be provided for Medicaid, which is a public insurance system for low-income earners. And the second condition is that most favored nation pricing shall be provided for products to be launched going forward. And the third one is that strengthening price negotiation in other countries than the U.S. and the increased revenue shall be used to lower prices in the United States. And utilizing the direct-to-consumer or direct-to-business model will be utilized without having the intermediaries and high-volume repaid product shall be offered with the MFN pricing. And these are the 4 conditions.
And these were all mentioned and demanded to the pharmaceutical companies when executive order was issued in May. And there has been no change to that. And these are not legally binding yet as well. And these are the responses, which are expected to be done on a voluntary basis by pharmaceutical companies. Therefore, these are not legally binding. And regarding your question, whether we have been engaging with the administration or government, we have not been contacted regarding the specific products, and we have not received the letter which has been sent to 17 pharma companies.
We have a team in Washington, D.C. in the U.S. So this D.C. office team has its unique proprietary network. And also, we are working with pharma in the United States. So through pharma as well, we will continue our engagement with the Trump administration in order to identify how specifically this most favored nation treatment will be conducted. And with that, we would like to take necessary measures.
[Interpreted] With that, we would like to end today's briefing session on the results -- financial results from Q1 fiscal 2025 of Eisai Company Limited. Thank you very much for attending today.
[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]