CHGCF (CHGCF) Q3 2026 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you very much for attending the conference on FY 2026 December Third Quarter Financial results despite your busy schedule. I am acting as a moderator today. My name is Miyata from IR Group. Today, we are holding this session on the Zoom webinar platform. As we present on the Page 3 of the presentation material, we have set forth the agenda. Today's presentation is conducted in Japanese. However, we have a simultaneous interpretation service available into English. If you wish to listen to English translation, please select the language of your choice at the bottom [ right-hand side ] of your screen. We are going to take questions after the completion of the presentation. We are going to spend 30 minutes for Q&A session. [Operator Instructions] Now I would like to invite Okuda to present the summary of the third quarter results for FY 2026.

Good afternoon. I am Osamu Okuda, President and CEO. Let me give you an overview of our third quarter results for fiscal 2026. Please turn to Page 5. The third quarter delivered both growth in both revenue and profit. Sales were solid in Japan and overseas and other revenue also grew. We are tracking well against our full year forecast and expect to exceed it. On the business front, development of Hemlibra auto-injector has moved forward, and we now expect its launch in Japan and globally in 2027. In September, 3 of our researchers were awarded the Lasker award. Going forward, we will build on our unique technologies and science to strengthen our drug discovery capabilities and drive sustainable growth. Please move on to the next page. Next, I will explain the factors behind the increase in revenues. Revenue increased by JPY 156.5 billion, up 17.2%. In the domestic market, despite negative impacts from drug price revisions and the penetration of generics, sales increased by JPY 62.6 billion, driven by growth in both core and new products. In addition, the front-loading shipments to pharmaceutical wholesalers as a transition measure towards the operation of the next-generation core business infrastructure contributed to the increase in net sales. For overseas, despite the impact of lower export unit price increases driven by export volumes and exchange rate impact largely offset this, resulting in an increase of JPY 49.6 billion. In particular, exports of NEMLUVIO for Galderma and Alecensa for Roche increased. Other revenue increased by JPY 44.2 billion due to increase in royalty income from Hemlibra and NEMLUVIO as well as milestone income. Domestic sales, overseas sales and the other revenue all increased, achieving top line growth. Finally, I would like to move on to the next slide. I want to talk about receiving the Lasker award. The creation of Hemlibra originated from a strong desire to reduce the burden on hemophilia A patients and their families. I would like to express my deep respect for the creativity and the tireless effort of our researchers who generated the original idea of substituting Factor VIII function with a bispecific antibody and overcame many difficulties such as molecular design and manufacturing technology development to make it a reality. This journey embodies our frontier spirit of thinking for ourselves and continuously taking on unprecedented challenges. Going forward, each of our researchers will carry on this spirit to further enhance the drug discovery capabilities of the entire organization, centered on proprietary technology and science, we will continuously create innovative medicines and link them to sustainable growth. And this concludes my summary.

Next, Tsukasa Kusano will update you on our development pipeline for Q3 of FY 2026.

I'm Kusano, Head of the Project and Lifecycle Management unit. I will cover the development pipeline for the third quarter 2026. These are the main topics for the third quarter. Approval. Enspryng, our in-house product received U.S. approval for thyroid eye disease. This is a label expansion filing. We filed 4 projects. First, Enspryng, filed in Japan, the U.S. and in Europe for MOG antibody-associated disease. It has SAKIGAKE designation in Japan and priority review designation in the United States. Hemlibra, in August, we filed the auto-injector as an additional dosage form. I will give you details later. Also in Japan, vamikibart was filed for macular edema associated with non-infectious uveitis. We are progressing steadily towards our record number of planned filings. Study initiation, cevostamab started a Phase III study in relapsed or refractory multiple myeloma. AQUA07 (sic) [ GYM329 ] was recovered at the last quarter conference. Emugrobart, as disclosed on the Tokyo Stock Exchange on September 28, we decided to discontinue development in obesity. After the license is returned from Roche, we will start preparing to resume in-house development for SMA, including out-licensing to third parties. Readouts, Lunsumio and sefaxersen, each met primary endpoints at the Phase III interim analysis. Please refer to the next slide. Major medical conference presentations are shown. I will describe the Phase III results of Divarasib in second-line non-small cell lung cancer later. cevostamab has orphan drug designation for relapsed or refractory multiple myeloma. Agreements and out-licensing. All 3 have previously been disclosed in news releases. AID351, an anti-dengue virus antibody, we signed an exclusive license agreement with GlaxoSmithKline for development, manufacturing and commercialization for Flavivirus infections, including dengue fever. A [ RAF-MEK ] molecular glue for solid tumors, SPYK04, we granted InxMed based in Hong Kong with strength in oncology, exclusive rights to develop, manufacture and distribute globally for all indications. At the bottom of this page, our in-house DONQ52 will be presented at the ICDS 2026 in mid-November. We will report the Phase Ia/b results in celiac disease plus biologic PoC results from the Phase Ic study, which verified DONQ52's mechanism of action in humans. Here are the key R&D milestones for 2026. Underlying and/or in both funds are items that changed since the last earnings conference and are as I have described. The only remaining event I have not is the start of the next NXT007 Phase III pediatric study. Preparation is progressing smoothly. Next, I would like to introduce the development of the auto-injector formulation for Hemlibra. Hemlibra has contributed to hemophilia A as a drug whose efficacy and safety have been observed in patients with various clinical backgrounds since its launch. Through dialogue with various stakeholders in hemophilia treatment, we have explored new delivery devices to create an environment where patients can continue treatment more easily. As a result, aiming to reduce the burden and anxiety felt by patients and families regarding injection prep and operation, we've decided to develop this auto-injector. During development, we aim to set the proper dosages, reduce needle stick risks and boost peace of mind with a human needle design and improve QoL through ease of use and shorter treatment time. We aim to launch it globally and in Japan in 2027. And in Japan, we completed the regulatory filing in August 2026 this year. Next, I will explain the results of the Phase III Krascendo-1 study of Divarasib. For this trial, in previously treated KRAS G12C mutated unresectable advanced and recurrent NSCLC, results were presented as a late-breaking abstract at the recent ESMO Presidential Symposium. They were also published simultaneously in the New England Journal of Medicine. This study compared Divarasib head-to-head with first-generation KRAS G12C inhibitors. Divarasib demonstrated superior efficacy compared to those agents. First, for the primary endpoint of PFS, progression-free survival, it reduced the risk of disease progression or disease by 42%. In addition, for the key secondary endpoints of OS, overall survival, it reduced the risk of death by 44%. Divarasib achieved a median OS of about 18 months, outperforming the 12 months for sotorasib and adagrasib. No new safety signals were observed with Divarasib and frequent treatment-related adverse events were mostly low grade and manageable. Based on these results, we plan to file for approval in Japan within this year. KRAS G12C mutated NSCLC is a rare disease and will advance development to deliver Divarasib as a new treatment option as quickly as possible. Lastly, I would like to show our projected submissions. Projects with a light blue star are newly added ones. And those with green stars have changes in their projected submission year. Given projects progress, trontinemab for Alzheimer's disease has been brought forward to 2028 from 2029 and beyond. For 2026, 6 more projects are scheduled. We are diligently working toward filing for all of these projects. The following slides are attached as a reference material, so please refer to them as needed. That concludes my presentation.

Finally, Taniguchi, our CFO, will walk you through the Q3 2026 consolidated results on a core basis.

Hello, I am Taniguchi, CFO. Let me now walk you through our financial results for the third quarter up to third quarter of fiscal 2026. First of all, P&L, starting with revenue. This came to JPY 906.8 billion, up JPY 112.2 billion or 14.1% from a year earlier. And this is a plus by 19.0%. The core operating profit came to JPY 536.1 billion. And I would like to take you this in order. This was -- first of all, overseas sales rose JPY 49.6 billion or 11% to JPY 500.5 billion. And both the new products as well as the mainstay products moved nicely, and we have been able to absorb whatever changes that had an impact by the price revision. We also have replaced ERP with the go-live on October 13. And over several weeks before and after that, we had to stop shipment in Japan. And so in the third quarter, ahead of time, we have increased shipping, which was an effect by about [ JPY 30 billion ]. So that is there. But taking that -- even with that, we believe that we see a growth over previous quarters. Now overseas, in addition to main products for Roche, we have NEMLUVIO export to Galderma, which is doing well, coming to JPY 500.5 billion. This is JPY 49.6 billion above last year year-on-year, plus by 11% and also, we have the royalty and milestone revenue, which came to JPY 161.3 billion, which was a JPY 44.2 billion positive year-on-year. In addition to royalty payments from Roche, we -- on a cumulative [ 9 months ] basis, we have received onetime revenue, including royalty. And so we have seen major increase. Next, on the cost. The cost of sales was JPY 314.3 billion, up JPY 51 billion or 19.4%. Now this actually reflects strong growth of sales itself. Also cost of sales ratio because of the changes in product mix -- in particular, domestic sales where imported products carry relatively higher costs accounted for a larger share. It was a 1.6 points rising to 34.7%. R&D expenses rose due to projects progressing quite well to JPY 141.2 billion by JPY 12.4 billion. SG&A, we had new product launches and the promotional expenses in the first quarter. And we also had the enterprise tax and bonuses. As a result, that came to JPY 76.9 billion, rising JPY 7.5 billion. And as a result, operating profit grew JPY 85.6 billion to JPY 536.1 billion and the operating margin improved 0.8 points to 50.2%. Finally, net income rose to 384.7% (sic) [ JYP 384.7 billion ] higher financial account balance on rising interest rate contributed to this, outpacing the 19% growth in operating profit. The next page actually shows the breakdown and changes in sales. Starting at the bottom, the dark blue, domestic oncology sales, JPY 204.8 billion, which is up JPY 24.1 billion year-on-year or 13.3%. Lunsumio, new product grew. And so the Polivy combination with Lunsumio was approved in March. Phesgo also grew steadily, more than offsetting the decline in Perjeta. And also Avastin continued to decline under the impact of NHI price revision and generics. Specialty sales, JPY 201.1 billion, up JPY 38.5 billion or 23.6% alongside the mainstay products, Hemlibra, Vabysmo, we had new products, the Evrysdi also grew steadily. Overseas sales were JPY 500.5 billion, up JPY 49.6 products, Hemlibra, Alecensa, Actemra, all of these mainstay products grew steadily. Next page actually shows the quarterly progress for Hemlibra and Actemra, our 2 largest export products against the full year outlook. For Hemlibra, at the moment, we expect the full year sales to come in line with the forecast. We have completed up to the third quarter. And for the fourth quarter also, the plan for export has already been fixed. So if it moves along this line, then we will be very close to full year forecast is what we expect for Actemra. As we are showing on the right-hand side, the is JPY 121.7 billion in sales up to the third quarter, which is very, very close to JPY 130.8 billion, which is our forecast. So as to say, we expect the full year sales to actually exceed the forecast by about or more than JPY 10 billion. Next, operating profit breakdown. Starting from the left, this is the difference against last year. In Japan, sales volume grew substantially. This is JPY 62.6 billion. There was a volume increase, which offset -- more than offset the price revision. Also for overseas was JPY 49.6 billion. We have seen reduction in export unit price. And we also, however, the increase in sales in emerging countries, and that led to lower unit price. But we had more than offsetting that in terms of volume. And we also had the effect of foreign exchange, and that it came to JPY 49.6 billion. And we had other revenue also increased JPY 44.2 billion. And so that led to the increase by JPY 85.6 billion. Next is for single quarter changes. We have seen an increase in operating profit in the third quarter. And in the back end, we had what I have listed. In addition to product mix, we also had in Japan, we have posted what would have been posted in the fourth quarter actually posted in the third quarter. As for cost and expenses, we are seeing changes as we had expected. This shows the components of revenue by quarter. Then sales in the third quarter have jumped, as you can see. This is in the early JPY 30 billion. But even if you exclude that, we believe that this is a positive over past quarters. This slide shows year-to-date [ 9 months ] progress against the financial forecast. For both revenue and profit for the third quarter, 75% is the benchmark. However, we have exceeded that level significantly, especially good performance is seen in domestic market -- domestic market. This is due to the front loading of the shipment in preparation for the ERP introduction. But compared to the progress we made in 2025, so far, we've made higher progress. And against the full year forecast, it is very likely that we are going to achieve the full year forecast number. Now this slide shows the progress against initial forecast for each segment and individual products. Across major products, sales progress is actually higher than the last year's level. Now this page shows the impact of exchange rate fluctuation -- compared to the last year's actual rate, well plan last year was [ JPY 171.62 ] and this year, JPY 184.21, meaning yen is depreciated this year like by [ JPY 13 ]. And in terms of revenue, that gave us impact of JPY 40.6 billion in revenue and JPY 26.6 billion in OP. And next page shows the balance sheet status. The total assets stood at JPY 2,374.3 billion, a decrease of JPY 94.3 billion from the last year. The main factor was a decrease in cash due to the payment of special dividends. Net assets increased by JPY 62.8 billion to JPY 2,088.5 billion as the accumulation of equity from profits exceeded dividend payments. Now while total assets decreased, net assets increased slightly, rising the equity ratio to 88%. Now cash -- earlier, I said cash decreased by [ JPY 170 billion ]. But next page shows the situation of net cash. As of the end of last year -- as of the end of last year, we had JPY 979.7 billion cash and deposit. And now we had operating free cash flow in the past 9 years (sic) [ 9 months ] of JPY 427.7 billion. And then we paid tax -- corporate tax and special dividend and the result is a decline of JPY 110.7 billion because the total payment of tax and special dividend totaled [ JPY 869 billion ]. And next slide shows the difference between core-based financial figures and IFRS-based figures. So we have depreciation for the intangible asset and ERP introduction cost and business restructuring costs. All those items are included in the adjustment. Now last page list up the already approved CapEx plan in the form of this -- and that's all from myself. Thank you very much.

We will now move on to the Q&A session. Takano, Head of Marketing and Sales Division will also join for the Q&A. [Operator Instructions] Please also note that the audio recording of the questions will be posted on our website at a later day together with the presentation. Let me describe once more how to select your language. [Operator Instructions] Now we will take your questions. [Operator Instructions] Let me invite Mr. Matsubara from Nomura Securities. Mr. Matsubara, can you hear? We cannot hear you. I wonder if Matsubara-san -- can you hear me now?

Yes, we can. Yes, I am Matsubara with Nomura Securities. I apologize for the glitch. The first question has to do with the JPY 30 billion due to ERP system replacement, which came for the domestic sales. Is this a onetime thing? Just one question. No, that was my first question.

Yes, this is just onetime, which during the term, which will be resolved in the fourth quarter. So the increase in the third quarter will be adjusted in the fourth quarter, and that's it.

My second question has to do with GYM329. What was the reason that there was no effect shown for obesity? And I was told earlier that neuromuscular disease in neuromuscular disease increase in muscle volume will not directly lead to improvement in motor function. Can you describe whether there was a tendency for improvement?

Thank you very much, Matsubara-san, for your question. This is about GYM329 study results. The Phase II MANATEE study outcome, which was published for SMA patients included ambulatory and non-ambulatory patients. We were not able to see a consistent efficacy in both as a result led to discontinuation. That said, when we look at the long-term data for both ambulatory and non-ambulatory, we were seeing a tendency of improving motor function. So that's slightly different. By improving upon Phase III study design, there is a possibility we believe that the efficacy can be verified. So there is some difference there. So in addition to longer-term administration and the inclusion, exclusion criteria for Phase III being adjusted and also think reconsidering concomitant drugs, we may be able to verify effect and we might [indiscernible].

In addition, you are thinking, I believe, about out-licensing. Are you actually in the process of negotiating or you are still waiting for Phase III study?

We're doing both. We are studying the study and also we also have third-party out-licensing considered.

Next is [ Mr. Seki ] from UBS Securities.

My name is [indiscernible] -- congratulations on Lasker award. I have 2 questions. My first question is related to the royalty of Foundayo in the third quarter. In [indiscernible], you showed us the regional sales. So I did my math, and I would imagine that size of the royalty is in the range of JPY 2 billion to JPY 3 billion. Am I correct?

This is Taniguchi speaking. Thank you for your question. Well, we cannot disclose the details. There are various components that you may want to consider in your math, but it's included in the other revenue outside of Roche.

Next is about DONQ52 on 20th of November Friday, [ Phase Ic ] is expected to be out, meaning the patient data is expected to be out. What kind of data should we expect? For example, VH/CD ratio or symptom score? Are you planning to disclose those?

Thank you very much for your question. On DONQ52 Phase Ia, Phase Ib, Phase Ic study results is evaluating safety, tolerability, PK of DONQ52. And by -- through the intake of gluten, the gluten intake is inducing activation of T-cell, but we are going to see how it's suppressed. And also, we are going to present the biomarker-related information. We are not planning to present the symptom-related information.

Next, from Citigroup, we have Yamaguchi.

Yes. My name is Yamaguchi from Citigroup Securities. My first question is slightly overlapping with what Matsubara-san asked earlier. This has to do with the domestic or Japanese sales brought forward. So this has nothing to do with overseas sales. It involves only the wholesalers in Japan. Also, you are showing sales and there was no increase in associated costs.

Thank you. This is Taniguchi. Thank you for the question. This is something that happened only domestically. It has nothing to do with the overseas business. And that has had no effect on the cost side. It only involves sales. By sales, it seems that there were increase or changes by 5% to 6% in terms of progress rate, it seems that it is flat across every product. A breakdown by product is not what we disclosed. So I hope you will understand that. But early JPY 30 billion is for the overall. And it's not that some product that out or stood out.

But appears as if this growth is double digit, which means that we could have gone for domestic.

Yes, that's my understanding.

My second question, and this is related to the first. [indiscernible], you probably have your own forecast, and I think that it's included in the royalty outside of Roche. And it seems that the progress rate up to Q3 is lower compared to the forecast. And of course, there's [indiscernible], but there is this gap. And I wonder if this is meeting a forecast, it's short of that.

Thank you very much. I would like to say that this is more or less what we have expected.

Next is from JPMorgan Securities. Mr. Wakao, please.

Mr. I am Wakao from JPMorgan. My first question is related to numbers. I want to ask this question to Taniguchi. In your explanation, you've given us the reason for the outperformance this third quarter. So please -- but on top of that, for overseas export, I think the progress is quite well at 117%. This is due to the good performance of NEMLUVIO. And I would like to get your outlook into the remaining 3 months. And then for royalty, Roche and others can you comment? It seems like the royalty from Roche is progressing quite well, but the non-Roche royalty doesn't seem to be progressing as well as Roche in terms of the progress.

For NEMLUVIO, it's in overseas others. It's in appendix. If you look at others, up until the third quarter, progress against the full year forecast is quite good. So it's progressing very well. Now for the fourth quarter, we have already factored in the export plan. So for now, it is likely that we are going to achieve the full year forecast. The question is what is going to be the magnitude of upside that I cannot tell, sorry. Now regarding royalty, well, with Roche, this is progressing well. When we look at the Roche already published overseas revenue in the third quarter, it's progressing quite well. And non-Roche is also within our expectations.

Export others, I think would include NEMLUVIO. So compared to the initial forecast, you are seeing a bigger demand -- so you have exceeded the shipment plan up until the third quarter, export does not happen in the same pace, but it's within our expectations. My second question goes to CEO. Your stock price has been adjusted and valuation is coming down. But now your third quarter is strong. And penetration of Foundayo and GYM329 obesity result was not meeting the initial expectation. So market is looking at your company in a rather pessimistic manner. But then for Foundayo, it is progressing almost as per your plan. And I think we can still expect good profit growth, including the pipeline. So my question is how do you see your pipeline? And if you have any like positive factors that may positively affect your valuation and stock price, I would like to know.

Thank you very much. There are various factors affecting our stock price. So I have not much to comment, but Foundayo sales is progressing as per our plan. And looking at the Chugai's pipeline, as you can tell, we have a quite attractive pipeline, and we have promising projects. So what we can do is to work on the project with good faith based on the science. And in terms of drug discovery and research, it's very important to generate a new modality, set up -- start the new projects. And for 2027, '28, these are going to be a very important timing for us because we have promising projects, which are expected to offer us data.

Next, Morgan Stanley MUFG Securities, Muraoka-san, please.

I am Muraoka-san with Morgan Stanley. This is a question I always ask at the third quarter timing, and I apologize for repeating my question. And this has to do with your thoughts about the next year, next term. Based on the sell-side consensus we received from IR feedback, you are expecting core profit of JPY 800 billion. I have no problem about the increased profit, but any sell-side consensus for next term -- can you give me some sense of whether you expect it to be above or below or any signs at all to the extent possible?

Muraoka-san, thank you for that question. Yes, this is the third quarter nearing next year, and we do very well understand your intent the question. But discussions about next year, there's very little that we can say at this point in time. There is going to be a conference planned right at the beginning of next year. I would like to talk about next year as we enter next year.

I understand. Yes, I understand. Let me switch to a different question. The second question. I understand that in July, you have established an office for investment strategy. Why? And you did talk about if there are attractive technologies, you will consider. But again, -- the cash need is not that great, 8,700. As was mentioned by Wakao-san, the share prices, as you can see, in 2025, we did receive a big dividend. Are there any gifts to investors that we can expect to receive and inclusive of this investment strategy you have?

Thank you, Muraoka-san, for that question. About 2 years ago, our capital allocation policy was written and disclosed by Chugai, and there were 2 main pillars. One is return to shareholders. And the second is to enhance the drug discovery capability of Chugai and also introducing assets, acquiring that to raise value, corporate value. So there are 2 routes. And we would like to strike the best balance between those 2 to make sure that we return to the shareholders. At the same time, reinforce our drug discovery, new drug discovery capabilities. Now asset -- new assets being introduced, as has been pointed out by many investors, we believe it's very important. Now open innovation -- right from the beginning of 2025, top 5, we have been promoting this towards 2030 and the establishment of this new organization for strategic investment is part of that, part of this open innovation strategy. The Chugai Venture Fund, which we opened in 2023 was for early start-up venture companies to invest in potential future collaboration. And once technology or science becomes mature, we would like to move forward more urgently in collaboration. We have a partnering office established in West Coast U.S.A. We know that there are very powerful academic institutions, universities on the West Coast, and we would like to more strongly promote research collaboration and the office was for that. That is just the starting point. Eventually, we want to introduce new assets, and we also have an eye in acquiring companies. And we want to create a kind of capability within Chugai Pharmaceutical. And the organization to do that is the strategic investment group. And they are now in the process of coordinating a policy for strategic investment. And eventually, all of that will lead to specific action once we see opportunities.

Next is from Macquarie Capital, Mr. Tony, please.

Can you hear me? So first of all, congratulations on the Albert Lasker award. I hope you also win the Nobel prize. How should we think about the gross profit margin of the Hemlibra autoinjector? Do you think that because of the device, you would have -- you will have a lower gross profit margin? And also, is there anything about the volume of the injection and the time it takes for the auto-injector to give the drug typically in a number of seconds. So that's my first question. The other one is about Divarasib, the Phase III Krascendo-1 study presented at ESMO 2026. It was presented on the Sunday Presidential Symposium 2 that was very well received. Just wanted to see if you think this -- the program for this drug in lung cancer would affect your R&D budget.

Thank you very much for your question. With regard to the auto-injector, we are targeting the launch in 2027. In Japan, we have already filed for approval. And outside of Japan, we are going to submit the filing as soon as possible. And in terms of the impact on the cost ratio, there is nothing material. So auto-injector is highly convenient and it can offer high added value. So it would enable us to maintain the current level of profit. So we are not expecting any increase of cost ratio as a result of auto-injector. Now let me talk about the dose and the dosing time in seconds. Thank you very much for your question. Now with regards to the dosing volume, again, we submitted filing this year in August and the dosing and administration is subjective to the drug review. So at this point of time, sorry, we cannot disclose you and not for dosing volume now dosing time, when auto-injector is placed until the completion of the dose, everything should be finished within 10 seconds. But we need some we -- in the past, we needed some preparation until the actual dosing. We needed to go over several steps, but those preparation will be not -- will not be necessary anymore. So it will reduce the burden on caregivers. And in the past, like with the vial preparation, it took like 5 minutes in total. So we can definitely reduce this time. Now on the Krascendo-1, as you pointed out, we made a presentation at presidential seminar in ESMO. Next-generation KRAS G12C in inhibitor and this drug was head-to-head compared. So this is the only global head-to-head comparison study. And the G12C mutation, amongst the other KRAS mutation, G12C mutation is one of the most popular one. Globally, it accounts for 14% of the NSCLC and it's also involved in the prognosis of the patients. Domestically, about 4% to 5% of patients do have G12C mutation. Non-small cell cancer, we have about 100,000 patients domestically. So if you do the math of multiplying 4% to 5%, we are talking about 4,000, 5,000 patients. And compared to the existing treatment, we are able to prove the superiority in terms of OS and PFS. This was the result of the head-to-head comparison. And I can't really talk about our sales expectation, but we expect this drug is going to bring about a big impact. That's all.

Next, we have from Daiwa Securities Company Limited, Hashiguchi.

I'm Hashiguchi with Daiwa Securities. My question is also related to the dose for auto-injector for Hemlibra. I understand that you cannot give the specific volume in terms of numbers, but we also understand that it's not per weight, which used to be how the volume or dose was chosen. If the dose is fixed, what about the differences in weight in the children, grown-up and adolescents. Are you going to set step-wise fixed dose? What about the equivalents shown in any studies to the conventional per weight dosing. If you have conducted such study, when data from that study will be published in what form?

Thank you very much, Hashiguchi-san, for your question related to Hemlibra auto-injector. As you correctly point out, since this is an auto-injector, this is one single-use product. So that probably will give you some idea. But again, this is related to the filing and review. And so how does that compare to by weight and what kind of data is being collected all related to the review process, we'd like to disclose that information, all those relevant information after the review outcome is published.

This is autoinjector. And is it possible for any patient to be able to freely adjust volume based on his or her weight? I mean, to use the same volume as before. What about the such auto-injector?

My apologies. Once again, anything that's related to dosage and administration, the regulators have very strictly told us that we cannot disclose anything that's related to review. So the information can only come after the review process is completed and published.

Next is from SMBC Nikko Securities.

I am Wada from SMBC Nikko Securities. With regard to Divarasib RAS development strategy positioning is something that I would like to know more. G12C mutated NSCLC for that patient group, you've proven good data. Congratulations. And I think you've been developing AUBE00. And at ESMO LUNA18 was poster presented. So you have like a total 3 projects or development going on, including like AUBE00 for RAS-related mechanism. My first question is that in the area of KRAS G12C how do you position AUBE00? And also, I think there was a presentation on LUNA18, and it showed some dose dependency and you have decided to drop this development due to the issue of safety. And I wanted to know if you have seen dose dependency in terms of efficacy and safety. PK, you looked at ERK and it seems to be going into the cell through oral administration and it seems like it has some antitumor effect, but I would like to know whether dose dependency was observed or not.

Thank you very much for your question. Wada-san on G12C and LUNA18 -- now for Divarasib and AUBE00, how do we position them differently? As you know, Divarasib is the inhibitor for KRAS G12C mutation. So we are talking about the G12C mutated patients and then AUBE00 is a pan-KRAS inhibitor. So on top of G12C, G12D and G12V, various KRAS mutations are expected to be able to benefit from AUBE00. Now the combination therapy of 2 RAS inhibitors are supported by multiple number of scientific rationale -- so in general, combination use can be one potential option. But at Roche in the area of KRAS and RAS, they have several drugs. So when we think about the Chugai Pharmaceutical as a part of Roche group, we need to explore what is the best way forward. Now on LUNA18 result, we didn't have safety issue for LUNA18. We looked at efficacy and compared to the competitors, we thought that it's going to be very difficult to differentiate LUNA18. That's why we have discontinued development. As you have pointed out, when you dose up, the concentration went up. So oral observation and cell migration were indicated. And as you pointed out, [ final ] signal pathway downstream and multiple molecular messenger RNA expression level tended to be decreased. Hold on. Now for safety, we've seen class effective adverse event. This was dose dependent.

Thank you very much. We have exhausted all the time for Q&A. We would like to, therefore, conclude the Q&A session. This concludes today's conference on FY 2026 December Q3 financial results. If you have any questions we were unable to address due to time constraints, please contact our Corporate Communications department. Our phone number and e-mail address are on the last page of the presentation materials. Thank you very much for joining us today. Thank you.