Daiichi Sankyo Co Ltd Q1 2025 Earnings Presentation Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Hidemaru Yamaguchi - Citigroup Securities - Analyst : First, I'd like to ask you about the progress of results. Of course, I do understand that there is some extraordinary profit including gain on stock transfer of Daiichi Sankyo Espha as well as ForEx impact, but you are making a very good progress. Your company has a tendency of higher costs spent in the second quarter than the first quarter, but still you're making a very good progress compared to your assumptions. Good progress is being made. Correct? First, I appreciate your comment on the progress in the first quarter. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2024 / 9:00AM, 4568.T - Q1 2025 Daiichi Sankyo Co Ltd Earnings Presentation

Question: Hidemaru Yamaguchi - Citigroup Securities - Analyst : Secondly, I want to make a few confirmations about Dato DXd top line OS data is already presented. I assume the details of OS data will be presented at WCOC or ESMO, but it was not included in your evangelist. You have not yet decided to present OS data in detail or is it going to be presented somewhere? Toshinori Agatsuma - Daiichi Sankyo Co Ltd - Executive Officer, Senior Director of Research in Main Research and Development Unit Due to the embargo policy of the academic societies, we cannot share specifically which Congress right now, but we are planning to present at either of the upcoming meetings in Autum.

Question: Seiji Wakao - JPMorgan - Analyst : In your response to Yamaguchi's questions, you mentioned that you will identify upside and downside and make a revision accordingly. Could you please elaborate on those upside and downside factors? I thought downside may mean that the approval of HER3-DXd could be delayed, resulting in a shift in the timing of sales. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2024 / 9:00AM, 4568.T - Q1 2025 Daiichi Sankyo Co Ltd Earnings Presentation

Question: Seiji Wakao - JPMorgan - Analyst : For HER3D XD, a possible change would be just sales based on the timing of approval, correct? Upfront payment related to U.S. markets refusal rights or continuation of the development would not change according to your assumptions, right? You have not changed your assumptions from before, correct?

Question: Seiji Wakao - JPMorgan - Analyst : Also, I would like to know more about the progress of Enhertu. The Q1 performance of Enhertu exceeded your plan. In particular, it seems to me that, the United States is making a solid progress. Which tumor type is growing? You explained cancer types across the board, but any particular tumor type that is growing?

Question: Seiji Wakao - JPMorgan - Analyst : But DB-06 patient population is not increasing in number right now? Correct. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2024 / 9:00AM, 4568.T - Q1 2025 Daiichi Sankyo Co Ltd Earnings Presentation

Question: Seiji Wakao - JPMorgan - Analyst : Do you have any idea about the timing when Enhertu is included in NCCN guidelines? Toshinori Agatsuma - Daiichi Sankyo Co Ltd - Executive Officer, Senior Director of Research in Main Research and Development Unit We cannot tell. As of now, we can just comment that we are hoping for an inclusion in the guidelines as soon as possible.

Question: Kazuki Hashiguchi - Daiwa Securities - Analyst : About your development strategy for EGFR muted NSCLC, Dato DXds TROPION-Lung14 studies started and TROPION-Lung15 study will start. It seems that you are reinforcing development in the segment. Then, what will be the positioning of HER3 DXd? You partner with AstraZeneca for Deto and with U.S. Merck for HER3. U.S. Merck has just paid half of the upfront payment and can decide from now whether to pay the remaining half? You are increasing investment in Dato in this patient segment. I wonder, how U.S. Merck will perceive this? And I feel there is some risk here. What is your thought and what kind of discussions are you having with U.S. Merck right now? This will not be a risk factor for a decision by U.S. Merck in October.

Question: Shinichiro Muraoka - Morgan Stanley MUFG - Analyst : First, about TROPION-Lung07 and 08 studies. I am pleased that you showed your confidence once again today. What is the current time line? It's not so clear to me. It was described somewhere that the AVANZAR top line results are anticipated in the second half of 2025. As for the timing of 07 and 08 study readout, there was a slight delay before, as I remember. But what is the current time line you're assuming? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2024 / 9:00AM, 4568.T - Q1 2025 Daiichi Sankyo Co Ltd Earnings Presentation Toshinori Agatsuma - Daiichi Sankyo Co Ltd - Executive Officer, Senior Director of Research in Main Research and Development Unit The sequence of data readout would be AVANZAR-07 study and then 08 study in this order, according to our current plan for now. That's all from me. 07 study data could become available in calendar year 2025 or FY2025. Based on the current plan, AVANZAR in 2025, 07 in 2026 and 08 in 2028.

Question: Shinichiro Muraoka - Morgan Stanley MUFG - Analyst : One more question. I would like to ask you about the future outlook of Lixiana, as sales are growing. Regarding the timing of LOE, life cycle and extension and those possibilities in the markets in Japan and Europe, what should we assume? I believe you can observe this with your ADCs sufficiently. Could you please share your current outlook?

Question: Shinichiro Muraoka - Morgan Stanley MUFG - Analyst : What about the possibility of growth with LCM? Can we have expectations? Or is it better not to expect so much there?

Question: Kasumi Haruta - UBS - Analyst : First, let me confirm a little bit about Enhertu. This year's plan includes mainly the progress of DB-03 and 04 in PanTumor. Those are the main. And you said that DB-06 has an upside. But let me confirm how much of this upside is included in the plan? Toshinori Agatsuma - Daiichi Sankyo Co Ltd - Executive Officer, Senior Director of Research in Main Research and Development Unit As for DB-06, we are unable to predict the timing at all. So we are not expecting it to be included in the current forecast. In that sense, if that NCCN guidelines are published within the fiscal year, we hope for a positive impact. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2024 / 9:00AM, 4568.T - Q1 2025 Daiichi Sankyo Co Ltd Earnings Presentation

Question: Kasumi Haruta - UBS - Analyst : The timing of the application in the United States is later than other regions, but I was wondering if there's any background or reasons to this? Toshinori Agatsuma - Daiichi Sankyo Co Ltd - Executive Officer, Senior Director of Research in Main Research and Development Unit This depends on the timing of application acceptance and there were only differences in timing.

Question: Kasumi Haruta - UBS - Analyst : In regarding Dato DXd, TROPION-Lung01 showed good results in non-squamous cases. PFS was extended by two months compared to chemotherapy, and OS also improved with clinical significance. Your company says that this is clinical significant but is it something that oncologists can fully accept? Chemotherapy has had strong side effects up until now, and there have been no new treatments other than chemotherapy for non-squamous cancer. So I think that if Dato DXd were to be introduced, it could be fully accepted. Could you please explain your thinking on this? Toshinori Agatsuma - Daiichi Sankyo Co Ltd - Executive Officer, Senior Director of Research in Main Research and Development Unit We have actually heard various feedback from physicians and we agree with what you have pointed out. We believe that the results are meaningful and impactful.

Question: Tony Rensson - Macquarie. - Analyst : The first two questions are on Dato and then I have one for Enhertu. So the Dato questions are, so first of all about TROPION-Lung01. So during the AstraZeneca briefing last week, so Susan Delbraith suggested that the FDA could possibly request an advisory committee meeting before the December 20th PDUFA date. Is this something that you guys can confirm? The other one is that, I noticed on slide 19 that, you guys added the AVANZAR study. I recall, at the presentation at the ASCO in 2022 in Chicago. Kenichi Takeshita told me that, you guys were not participating in the AVANZAR study, and that was completely a study run by AstraZeneca. Has that changed? Are you guys now participating, paying for part of the AVANZAR study? That's the two questions on Dato. My question on Enhertu is about DESTINY-Breast11. We understand that this trial is supposed to read out by the end of fiscal year 2024. Now we also know that recently, the FDA ODAC meeting on AstraZeneca's, AEGEAN study suggested changes to trial protocol in the neoadjuvant setting, separating it from adjuvant setting. Has that changed your DESTINY-Breast11 progress, in any way? That's my question on Enhertu. Toshinori Agatsuma - Daiichi Sankyo Co Ltd - Executive Officer, Senior Director of Research in Main Research and Development Unit I believe you asked me three questions. I would like to confirm them. The first one is about the possibility of holding an ODAC or an Advisory Board or Advisory Committee meeting. We are unable to inform you of the possibility of an ODAC at this time. We would appreciate your understanding. Regarding the second question about AVANZAR, is it right? I understand that you are asking about Daiichi Sankyo's position on this. Basically, this is a study led by AstraZeneca and the form of the conduct of the study has not fundamentally changed. However, I think I have shown you a map of potential first line therapies for lung cancer. This is a study that is in a very important position within that disease map. So I have included it in the map this time. I'm sorry, could you repeat your third question, please?

Question: Tony Rensson - Macquarie. - Analyst : Since I have four, if I may just add on one more. Your next generation ADC, DS-9606, we found online that there was a suggestion that the molecular target is Claudin 6. Is this something that you can confirm? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2024 / 9:00AM, 4568.T - Q1 2025 Daiichi Sankyo Co Ltd Earnings Presentation Toshinori Agatsuma - Daiichi Sankyo Co Ltd - Executive Officer, Senior Director of Research in Main Research and Development Unit Claudin 6 is the target in this ADC.

Question: Michael Nedelcovych - TD Cowen - Analyst : I have two. My first relates to Dato DXd. As has been noted, the pivotal frontline lung cancer trials are now well underway. Can you provide any insight into the biomarker plan? Have you, for example, built into the trials any predefined biomarker subgroups that could form the basis for a filing? And then my second question relates to your long-term R&D plans. You have built a world-class ADC platform. Are there any plans to apply this technology to therapeutic areas beyond oncology, for example, by testing ADCs in immunology? Toshinori Agatsuma - Daiichi Sankyo Co Ltd - Executive Officer, Senior Director of Research in Main Research and Development Unit I will answer the second question first. I think your question was about how we are thinking about activities other than oncology in our strategy to create new ADC technologies within our long-term strategy. Regarding this question, we are developing technologies at the research level that utilize various payloads as new generation of ADCs. Some of these are of course, oncology related and we are also working on those in other areas. As for your first question, I think you were asking about the stages of biomarker preparations. AstraZeneca and Daiichi Sankyo are currently deepening discussions on this topic. We may be able to discuss this at an appropriate time in the future, but at this point we are not able to talk about it.

Question: Miki Sogi - Sanford Bernstein - Analyst : Sorry, I think the name was wrong. I am Sogi from Sanford Bernstein. I have a quick questions regarding Dato TL01. You said that OS was not statistically significant this time, but when I think about the hierarchy of statistical testing, this is not very positive. So I think that this is the reason why statistical testing of PFS or OS in non-squamous patients is not possible. Could you tell us if this could actually be an obstacle to the approval by the FDA? Toshinori Agatsuma - Daiichi Sankyo Co Ltd - Executive Officer, Senior Director of Research in Main Research and Development Unit With regard to the OS in the TL01 study, the study was not designed to verify the statistical significance of subgroups in the first place. Because of this, we have used the term clinical significant effect. I would like to ask if there is a part that I did not answer.

Question: Miki Sogi - Sanford Bernstein - Analyst : The data of TOP 2, the data competitor in non-small cell lung cancer was presented at ASCO, and the results showed that data works in non-squamous patients but not in squamous patients. While the data of Gilead's Torodelvi, Merck and Calon's MK2-870 showed efficacy, which was not related to histology. Regarding these two products, they have the same antibody, which is different from Datos and that linker is also a hydrolyzable linker, which is different group of products from Datos, if I may say so. So what is your company's hypothesis regarding the difference in the expression of these different characteristics? Toshinori Agatsuma - Daiichi Sankyo Co Ltd - Executive Officer, Senior Director of Research in Main Research and Development Unit This is a subject of a great interest to us, and we are currently conducting research on it. On the other hand, we have not yet fully developed a plausible hypothesis. However, as you pointed out, Ms. Koji, the linker is different and the antibodies are also different. The data suggests that the overall pharmacokinetics of the candidate compounds are very different because of the different payloads. It is very interesting to see the impact of these compounds on non-squamous and squamous cancer. But we are not yet in a situation, where we can conduct research with a solid scientific hypothesis. We are gathering information, therefore, from various angles and we are working hard to formulate and verify a hypothesis that seems to be correct. One last thing, please. AstraZeneca mentioned at their R&D meeting the other day that they are going to use a new biomarker, a machine-learning approach called continuous scoring. They said that, this approach will especially be applied to Dato. We are waiting for the data to be announced within 12 months this year, but I think that this new biomarker approach will be very important for ADC targeting in the future.