Daiichi Sankyo Co Ltd Q2 2025 Earnings Presentation Transcript

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

Question: Hidemaru Yamaguchi - Citi - Analyst : Can you hear me well? Hiroyuki Okuzawa - Daiichi Sankyo Co Ltd - President, Executive President, Chief Operating Officer, Representative Director Yes.

Question: Hidemaru Yamaguchi - Citi - Analyst : So does that mean that refiling is needed because the filing status was maintained you said previously? And CRL was issued, but still, the filing status was maintained. That's what you said. But refiling, is that going to be required? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / NTS, 4568.T - Q2 2025 Daiichi Sankyo Co Ltd Earnings Presentation Hiroyuki Okuzawa - Daiichi Sankyo Co Ltd - President, Executive President, Chief Operating Officer, Representative Director So technically, when we receive a CRL, that completes the submission process. So yes, we would need to reinitiate a new submission.

Question: Hidemaru Yamaguchi - Citi - Analyst : My second question is about Dato-DXd and it's progressing with many development clinical trials, and you may not be able to comment on that, but 12 -- December 20 PDUFA date and there are some concerns being expressed by some. And you have in discussion with FDA and what do you think about the approval potential on December 20? And ODAC is not going to be held but is there any updated information with regard to ODAC? Hiroyuki Okuzawa - Daiichi Sankyo Co Ltd - President, Executive President, Chief Operating Officer, Representative Director So I can't comment really on the details of the regulatory discussions that we're having with the FDA. I think we should be able to give you some updates on this in the near future, but not today. In terms of the possibility of ODAC, it's a little bit difficult to tell you exactly what the FDA is thinking because we're not the FDA but as a general statement, the FDA can request an ODAC at any time prior to the PDUFA date on any submission, not just the one that we're talking about today.

Question: Hidemaru Yamaguchi - Citi - Analyst : So another question about Europe. You mentioned Spain and the UK and it's a low HER2 reimbursement or the second line?

Question: Hidemaru Yamaguchi - Citi - Analyst : For HER2 low. Okay. Understood. And for the US, PDUFA date is February 1 and then you have come up with this forecast based on that assumption that you will be able to get an approval on that PDUFA date?

Question: Kazuki Hashiguchi - Daiwa Securities - Analyst : This is Hashiguchi. My first question is about TB-01 study of Dato-DXd. In all this analysis, statistical insignificance was not demonstrated as you had presented in your presentation. What about a numerical result? What were the trend? So I would like to know about this based on the results of other studies. When statistical significance was not obtained, you always explain, there was uncertainty in this -- of the efficacy or you saw -- so you mentioned the numerical value, but you didn't touch upon that. So in terms of the number or the trend, in both terms, the result were not too satisfactory or not to meet your expectation. Would that be the case? Hiroyuki Okuzawa - Daiichi Sankyo Co Ltd - President, Executive President, Chief Operating Officer, Representative Director Yeah. So we haven't published or presented the overall survival data yet. So I hope that you will be able to wait until we have -- we can show you the data at an upcoming conference. So -- but we are in discussion with the agencies on what we are seeing so far in terms of what was an interim analysis, and we need to really see what the final US data looks like. So I -- it's a little bit premature to comment on exactly how we and especially how the FDA views our data so far.

Question: Kazuki Hashiguchi - Daiwa Securities - Analyst : Okay. Thank you very much. One other thing is for the HER3-DXd collaboration with Merck one year ago, at the time, the contract execution, Merck, based on the one-year status of progress, we'll make a decision whether to pay an upfront payment -- the rest of the upfront payment. I think that was a nice structure of the agreement. Now that $715 million will be paid. What was the background from your perspective and from your understanding? So EGFR positive non-small cell lung cancer? When we consider the marketability of this, it was more confident than you had expected or the potential for the type of cancer you have a higher expectation. So I'd like to know how you interpreted this change in the position of the -- decision of the Merck. Hiroyuki Okuzawa - Daiichi Sankyo Co Ltd - President, Executive President, Chief Operating Officer, Representative Director I am not from Merck but I'm -- let -- so I'm going to be in part speculating on what they are thinking. I believe that they remain highly interested in this HER3 asset and there's a lot of value in this particular asset. I just want to make -- just to remind you that just in lung cancer, the majority of patients with lung cancer express HER3. I think the numbers are in the literature something like 70% to 80%. So there's a lot to be done in the field of lung cancer alone. And as you're probably aware, HER3 is expressed widely in many other cancers besides lung cancer. So there's a lot for us to be doing in this partnership and that is, I think the reason why Merck remains highly interested as we are in this particular asset.

Question: Seiji Wakao - JPMorgan - Analyst : I am Wakao from JPMorgan. My first question is about Enhertu. Your forecast for this fiscal year and how it's going to be affected, NCCN guideline listing I think it's kind of coming quite late, later than expected. So if you can get an approval before the listing on NCCN, but the listing of NCCN is probably not needed for you to achieve this fiscal year's forecast as long as you get an approval or do you still believe that the NCCN Guideline listing is needed before the approval to achieve the forecast? Hiroyuki Okuzawa - Daiichi Sankyo Co Ltd - President, Executive President, Chief Operating Officer, Representative Director Ogawa would like to answer your questions.

Question: Seiji Wakao - JPMorgan - Analyst : The second question and this is something to do with what the (inaudible) asked. It's about HER3-DXd filing and also approval. So in my understanding, the manufacturing issue is there and also regulatory issue or a negotiation is ongoing right now. And as for this manufacturing issue, do you still have a clear way forward to resolve this manufacturing issue? And you said refiling is needed. HERTHENA-Lung02 success, is it affecting that situation? So I think you thought that you could get an approval without the refiling. So I don't know what changed in terms of the regulatory negotiation. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / NTS, 4568.T - Q2 2025 Daiichi Sankyo Co Ltd Earnings Presentation

Question: Seiji Wakao - JPMorgan - Analyst : HERTHENA-Lung01 study success, is it affecting your regulatory strategy or not?

Question: Seiji Wakao - JPMorgan - Analyst : My last question is, [IDX] -- and has 3 DXd -- I-DXd and has 3 DXd KEYMAKER substudy pembrolizumab combination are now included under the Umbrella study by Merck? And if you can obtain a positive data out of these two subsets, I don't know which stage but [NCLC] (sic-NSCLC) non-small cell lung cancer, first line indication is something that you would like to get. HER3 is expressed in lung cancer as Takeshita explained. But I-DXd SCLC, it has been confirmed already. So do you believe that in non-small cell lung cancer, with a rational background understanding, you can move ahead with non-small cell lung cancer as well?

Question: Shinichiro Muraoka - Morgan Stanley - Analyst : Hello. I'm Muraoka from Morgan Stanley. So I think all the important questions have been already asked. However, I'd like to ask you some detailed numbers. The data book, in the first pages, the breakdown of the changes of the PL for SG&A. So other than the payment of ADC, so [JPY2,251] although the actual was not changed. However, the changes made was [JPY4,900]. Yes, there were certain increase before, but when I look at the number, so for the second half, you are planning to use the 4,200 to 4,900 which is a plus of 2,600 and 2,700. So I just wonder the calculation. How should I interpret this revision? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / NTS, 4568.T - Q2 2025 Daiichi Sankyo Co Ltd Earnings Presentation

Question: Shinichiro Muraoka - Morgan Stanley - Analyst : So the -- other than the DXd profit share of [JPY4,900] it's likely to be used by those factors you mentioned were still may have some unused expenses in the end. Well, so we'd like to be precise in terms of the forecast always, but even so we will not be able to use the app every time 100% when we look at the -- our records. But we will like to improve our precision and we like to use the expenses in planned manner to the plan. And one other question is that so in your this year plan that Dato, we'll see the approval in December, January and based on that, do the sales. Our expectation is JPY5 billion or so. However, if the -- your expectations were not satisfactory, the approval was not given. In that case, what would happen for the sales expectations? Even you cannot launch those products by the end of this fiscal year; still you can maintain this focus?

Question: Shinichiro Muraoka - Morgan Stanley - Analyst : And (inaudible) budget. I think to doubled because in terms of the sales focus, because the absence of generics. So do you expect generic will not to be launched for the time being or you just got lucky for this fiscal time because the generic was not launched?

Question: Kasumi Haruta - UBS Equities - Analyst : Haruta from UBS. Can you hear me? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / NTS, 4568.T - Q2 2025 Daiichi Sankyo Co Ltd Earnings Presentation Hiroyuki Okuzawa - Daiichi Sankyo Co Ltd - President, Executive President, Chief Operating Officer, Representative Director Yes.

Question: Kasumi Haruta - UBS Equities - Analyst : So what about the sequential usage? Is that your assumption, right?

Question: Kasumi Haruta - UBS Equities - Analyst : And my second question is ADC development biomarkers to select the patients who can benefit the most. So I think biomarkers are very important in any development of ADC. And for Dato-DXd, a TROP2 positivity. And of course, for TROP2 IHC, which is a conventional means, it's very difficult to measure TROP2. Therefore, it's taken time to develop another biomarker. But B7-H3 or cadherin-6, for any ADCs other than TROP2, which patients can benefit the most? I think it's very important to develop biomarkers to understand that. So what's your idea of development of biomarkers?

Question: Hiroshi Wada - SMBC Nikko Securities Inc - Analyst : I'm Wada from SMBC. Can you hear me?

Question: Hiroshi Wada - SMBC Nikko Securities Inc - Analyst : So I have a question regarding the company's of action of ADC. First, biomarker Dato-DXd. That's first question. So for HER2 to Enhertu, so probably the 20% HER2 was the official target but now expression became lower, low or negative. So now response range expanded. But when you look at Dato-DXd, in lung non-small cell cancer like Enhertu expansion is kind of 60% coverage. And when it can cover the ultralow, probably you do not need to check the patients who are likely to respond to this. So having said that, what is the difference in terms of the background or the pathological difference between lung and breast cancer? That's my first question.

Question: Hiroshi Wada - SMBC Nikko Securities Inc - Analyst : One other question is that, so I'd like to know about the synergy effect of 6070 additional compound in your partnership with Merck. And so Merck already going on the clinical study with the KEYTRUDA and by looking at the PD-L1 pathology, synergy seems to be affected with that combination. But the combination with I-DXd, what will be the synergy you can think of? So engager T-cell may be more activated by that. So I'd like to know so far what you have understood that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / NTS, 4568.T - Q2 2025 Daiichi Sankyo Co Ltd Earnings Presentation

Question: Koichi Mamegano - BofA Securities Inc - Analyst : I am Mamegano from BofA. Can you hear me? Hiroyuki Okuzawa - Daiichi Sankyo Co Ltd - President, Executive President, Chief Operating Officer, Representative Director Yes.

Question: Koichi Mamegano - BofA Securities Inc - Analyst : Yes, that is correct. Ovarian cancer, yes.

Question: Miki Sogi - Sanford Bernstein - Analyst : I have several questions. First, collaboration continuation on how to see DXd with Merck. When I calculate more precisely, so application seems to be made in over eight years. So until ago -- year ago, HER3-DXd, it will become seven years after, and eight years after, is that the assumption? Hiroyuki Okuzawa - Daiichi Sankyo Co Ltd - President, Executive President, Chief Operating Officer, Representative Director Ogawa will answer to that question.

Question: Miki Sogi - Sanford Bernstein - Analyst : In your revision, the sales of Enhertu increased. However, profit share with AstraZeneca decreased. Could you tell us the background to this?

Question: Miki Sogi - Sanford Bernstein - Analyst : So next question is for Takeshita-san about DS-9606. So now we understand this is a new of the ADC platform and so it has a different the payload as well as the cleavable linker that you have actually disclosed the -- previously. So it almost looks like so CLDN6, what we understand is it's not expressed on the cancer cells, but rather it's expressed in the injunctions of the multiple cancer cells. And so for this type of the ADC with the cleavable linker, is it to target this type of known on cancer cell the antigen? And the -- so that now you have two type of ADC: one can -- the target the antigen on the cancer cells while this new one, that can target the antigen that are present in the proximity or the tumor microenvironment of cancers. Is it the kind of the rationale on the -- of your -- the drug development?

Question: Miki Sogi - Sanford Bernstein - Analyst : No, that's actually the very helpful to understand. So does that mean that CLDN6 is not expressed outside of the cancer cell? You said that it's expressed inside the cancer cell. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / NTS, 4568.T - Q2 2025 Daiichi Sankyo Co Ltd Earnings Presentation

Question: Michael Nedelcovych - TD Cowen - Analyst : I have three, if you allow me. My first relates to positioning of your ADC portfolio. Similar to a previous question but this time, EGFR mutant non-small cell lung cancer, both Dato-DXd and HER3-DXd have shown compelling data in EGFR mutant non-small cell lung cancer. So how do you plan to position these two agents in this indication? Are you considering combination or sequencing? And to the extent that sequencing of the two drugs might be pursued, do you worry about cross resistance given that they share a payload?

Question: Michael Nedelcovych - TD Cowen - Analyst : My second question relates once again to the PBD platform. Can you elaborate on the rationale for building out this ADC platform? DXd has proven itself to be a powerful warhead and there are of course, more tumor associated antigens that could be pursued. So is this simply diversifying the pipeline and leaving no stone unturned or are there specific reasons why you chose to pursue a PBD based payload?

Question: Michael Nedelcovych - TD Cowen - Analyst : My last question is once again on the Dato-DXd TROPION-Lung01 filing. You mentioned that FDA could convene an ODAC any time prior to the PDUFA. If the FDA does choose to convene an ODAC, would you consider that a positive development? Because it would mean the agency is strongly considering the application or would you take it as a negative development because it would mean the agency has potential concerns about the application? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / NTS, 4568.T - Q2 2025 Daiichi Sankyo Co Ltd Earnings Presentation

Question: Tony Rensson - Macquarie Group Limited - Analyst : So my last question is on your partnership with Merck, the DLL3 bispecific Merck MK-6070. So last week, at the ENA 2024 Triple Meeting, we saw Chinese biotech, Zai Lab, and they have licensed the drug from MediLink ZL-1310, demonstrated a very high response rates of 74% in DLL3 selected small-cell lung cancer patients. Obviously, it's -- some of the response rates is unconfirmed. So I see that in your study with Merck, you guys are also exploring a DLL3 enrichment strategy. So I just want to get a sense from you what is your current thinking on the DLL3 biomarkers. Are you guys using, for example, IHC versus NGS? Any thinking in terms of any threshold because my belief is that the DLL3 is also nearly ubiquitously expressed on small cell lung cancer. So that's my first question on the DLL3 combinatorial strategy with the Merck Harpoon asset. The next question is on AstraZeneca's China news. You guys probably heard that their China Head is under investigation in China. So just curious, you guys mentioned that for Enhertu revenue, it's doing very well in China. I just want to get a sense out of the ASCA revenue, what percentage is from China?

Question: Tony Rensson - Macquarie Group Limited - Analyst : Okay. So Enhertu in China, you guys receive co-promotion revenue from AstraZeneca. Hiroyuki Okuzawa - Daiichi Sankyo Co Ltd - President, Executive President, Chief Operating Officer, Representative Director That's 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. OCTOBER 31, 2024 / NTS, 4568.T - Q2 2025 Daiichi Sankyo Co Ltd Earnings Presentation