Takeda Pharmaceutical Co Ltd (TAK) 2008 Q1 法說會逐字稿

Thank you very much for your participation to the Takeda's conference call of first quarter financial results for fiscal year ending March 2007. My name Hirofumi Inoue, General Manager of Corporate Communications Department of Takeda.

Let me introduce the schedule and participants from Takeda. Mr. Yamaoka, General Manager of Corporate Strategy and Planning Department, Mr. Kiyoshi Kitazawa, General Manager of the Strategic Product Planning Department, Mr. Hiroshi Takahara, the General Manager of Finance and Accounting Department.

First we will make the presentation of financial overview of the first quarter followed by the R&D update. After that we will have a question and answer session and your questions will be welcome. We believe we can provide enough time for you during the session.

Now we start, please prepare presentation materials and also the earnings report in your hand. Thank you.

I am Hiroshi Takahara. I am General Manager of the Finance and Accounting Department. It is my pleasure to present you the summary of Takeda's consolidated results for the first quarter of fiscal 2007. Please take a look at slide number three.

Net sales increased by JPY32b or 9.6% from the same period in the previous year. Operating income increased by JPY21b or 15.9%. Ordinary income increased by JPY27.9b or 17.2%. Net income showed increase of JPY6.4b or 5.1% partly because extraordinary income decreased by JPY9.1b from same period last year. R&D expenses was JPY47.3b, a decrease of JPY3.3b or 6.5%. Earnings per share for the quarter recorded a rise of JPY11.44 or 8.1% over the same period of the previous fiscal year to reach JPY152.74.

Please take a look at next slide. Before going through each detail of our performance firstly let me explain about foreign exchange rate fluctuation, which has given a big impact to our quarter result. Average exchange rates during this first quarter were JPY121 to the dollar and [JPY163] to the euro. The yen became the weaker than the same period last year by JPY6.3 per dollar and JPY18.9 per euro respectively. As shown in this slide, favorable exchange rate increased net sales by net JPY10.1b, operating income by JPY4.0b, ordinary income by JPY5.6b and net income by JPY3.5b.

Now I would like to discuss the changes in sales in each of our business segments. Sales of Ethical Drugs segment increased by JPY32.3b or 10.9% from the same period last year. Sales in Japan increased by JPY5b and sales in overseas markets increased by JPY27.3b.

Growth of Actos sales was significant, JPY1.8b in Japan and JPY20.7b in overseas markets. Total them up, the worldwide sales increased by JPY22.6b or 26.9% accounting for over 70% of the total sales increase in the Ethical Drugs segment. Sales of Amitiza, which is sold by TPNA in the U.S. also increased by JPY5.6b, contributing to net sales growth.

In the Consumer Healthcare and other business segments sales remained almost the same as those of the first quarter last year.

I will explain the details of the sales of Ethical Pharmaceutical products in Japan. Sales grew by JPY5.0b or 3.7% mainly supported by the growth of Blopress, Actos and other core products for lifestyle related diseases.

In the diabetes field Actos sales grew by JPY1.8b or 21.8% supported by steady implementation of evidence-based promotional activities. On the other hand Asian sales decreased by JPY1.1b mainly due to the impact of generic products.

In May 2007 an approval was granted for an additional indication for the concomitant therapy of Glufast and Basen or other alpha-glucosidase inhibitor. We will enhance our presence further in the diabetes franchise. Blopress, our drug for hypertension treatment and our leading product in Japan, continues a steady sales growth. It sales in Japan increased JPY2.5b or 7.3%. Other mainstay products, Takepron and Leuplin increased its sales by JPY1.2b and JPY1b respectively.

In April 2007 new patients enrolment for post marketing surveillance was concluded for Enbrel. Sales of this drug for rheumatoid arthritis increased JPY1.7b. Moreover, sales of combined vaccine for measles, rubella grew by JPY2.3b.

Please look at slide number seven. Now I would like to explain details of sales by TPNA, our sales and marketing subsidiary in the U.S. total sales of the Actos family increased strongly by $117m or 19.2% from the same period in the previous year, supported by the expansion of the market share due to efficient promotional activities based on its product profile, and by the contribution of new products such as Actoplus Met and Duetact. At the same time a report published in May regarding cardiovascular safety of a competitor influenced our sales number too.

Amitiza which was launched in April last year grew by $46m partly due to competitor's withdrawal from the market. The sales of Rozerem have also increased steadily supported by promotion activities including continued DTC campaign growing by $15m.

Revenues from co-promotion activities decreased by $13m partly because the contract with Kos ended in December last year. Consequently net sales of TPNA increased by $165m or 25.2% from the same period last year. In terms of Japanese currency this U.S. dollar amount is equivalent to a JPY24.1b or a 32.1% increase. This increase, JPY5.2b, resulting from the positive impact of the weaker yen.

Please turn to page eight. I would like to discuss worldwide sales of our in-house Ethical Pharmaceutical products including sales by our equity method affiliates companies. Global sales of in-house Ethical Pharmaceutical products total JPY347.4b, an increase of JPY35.7b or 11.4% over the same period last year.

Looking this by geography, sales in Americas increased JPY25.1b or 15.2% mainly supported by TPNA sales. Sales in Europe increased by JPY2.4b, which included the positive effect of the JPY4.5b in currency translations. Excluding this translation effect, sales in Europe decreased mainly due to the decline in Lansoprazole. Sales in Japan increased by JPY6.7b, sales in the Asian market increased by JPY1.5b.

Please look at the next slide. Let me explain sales of our four international strategic products including the sales by affiliates. Lansoprazole was up JPY1.6b or 1.7% because of an increase in Japan and also of a positive ForEx effect. However the sales in U.S. and Europe on local currency basis declined, impacted by generic PPIs or proton pump inhibitors.

pioglitazone increased by JPY22.8b or 27.0% due to a remarkable increase in U.S. and also because of 50% increase in both in Europe and Asia as well as more than 20% increase in Japan.

Candesartan increased by JPY3.2b or 6.0% mainly supported by an increase in Japan. Leuprorelin showed a slight increase of JPY0.2b or 0.3% as the increase in Japan was almost offset by decrease in the U.S. and Europe due to a shrinking market and ever-fierce competition.

Aggregate sales of the four products were up JPY27.7b or 9.9%.

Now page 10, I'd like to explain the operating income key factors. The gross profit margin improved by 1.3 point mainly due to the increased sales of Ethical Drugs and the favorable ForEx effect of the weaker yen. The gross profit increased by JPY30.1b or 11.4%. SGA increased by JPY12.4b or 15.1% mainly due to the expansion of sales expenses by TPNA for Rozerem, Amitiza and a series of new products launched into the market since 2005.

On the other hand the total R&D expenses decreased by JPY3.3b or 6.5%, although the expenses for R&D activities increased as a result of the products in development. This decline in the total R&D cost was mainly because of the large in-licensing deals that happened last year such as Hematide. As a result operating income increased by JPY21b or 15.9%. The operating profit margin was 41.8%, 2.3 percentage point up from the same period last year.

Finally I'd like explaining the key factors driving the net income. The equity earnings of affiliates decreased by JPY2.3b from the same period last year. This includes a JPY1.4b decrease of equity earning of TAP in U.S.

On the other hand other non-operating income was up JPY9.2b, partly due to increased financial revenues of JPY4.1b in Takeda America Holdings resulting from higher interest rate, and also foreign exchange gain from the weaker yen contributed positively. As a result ordinary income increased by JPY27.9b or 17.2%.

Extraordinary income was JPY29.1b mainly from the sales of affiliate shares. However compared with the same period last year extraordinary income decreased by JPY9.1b. Taxes and others increased by JPY12.4b, consequently the net income increase was JPY6.4b or 5.1%.

This concludes my presentation of business results for the first quarter of fiscal 2007. Now General Manager Dr. Kitazawa from the Strategic Product Planning Department will give you update on recent R&D pipelines.

My name is Kitazawa, I would like to give you update on R&D pipelines and some recent topics. Please all look at page two.

The progress in the development in the first quarter is shown in the slide. SPI-0211 Amitiza, in June Sucampo Pharmaceuticals filed for an additional indication of IBS-C or irritable bowel syndrome with constipation to FDA. Once it is approved we think we can offer an important treatment option to the patients with IBS-C. As you know Zelnorm was withdrawn from the market, but nowadays, now it is allowed for restricted use.

Now the Phase III study of TAK-491 started. This is a successor to Blopress when the (inaudible) ARB anti hypertensive. Compared with other ARBs in the market this compound is expected to have stronger action of improving insulin resistance and decreasing proteinuria based on our non-clinical data.

Our anti diabetic agent SYR-472 now entered into Phase II clinical stage. Page three. SYR-472 is developed by Takeda San Diego or TSD, it is a DPP-4 inhibitor and it's positioned as a back up compound for SYR-322, which is currently in the Phase III and expected to enhance Takeda's franchise diabetes.

As for SYR-322, it is in Phase III and going on without any problem so far.

Lastly I would like to explain recent initiatives for emerging technologies to enhance our pipelines. In the antibody drug area we signed an agreement with Biowa for non-exclusive use of their Potelligent technology. This is expected to be useful technology to strengthen efficacy of antibodies.

Then in nucleic acid medicine area we signed an agreement with the U.S. bio venture Archemix for the research collaboration for discovery of aptamer therapeutics.

Aptamers are single stranded nucleic acids that form well-defined three-dimensional shapes allowing them to bind target molecules in the manner that is conceptually similar to antibodies. Aptamers combines the optimal contract with sticks of small molecules in antibodies including high specificity, affinity, chemical stability, low immunogenicity and ability to target [protein 14] interactions. In contrast to monoclonal antibodies, aptamers are chemically synthesized rather than biologically expressed.

And I would like to add comments based on the news release and we acquired additional indication for the Benet and please refer to the news release. This is for the Paget's Disease, this is bone metabolism disorder although the number of patient is small, it is a refractory disease. We hope that this additional indication will be helpful for the patient suffering Paget's Disease.

And another point is regarding FDA final meeting outcome. We have released this announcement. As you know at an advisory committee meeting of the U.S. FDA was held yesterday in U.S. time, or early morning today Japan time. This committee meeting reviewed the cardiovascular ischemic thrombotic risks of the [TGDs], with focus on rosiglitazones presented by FDA and GSK.

We underscore our position that Actos offers are proven safety profile regarding the risk of cardiovascular disease based on the results of proactive study, which showed the reduction of the occurrence of major adverse events such as myocardial infarctions, stroke and mortality. I understand the difference between rosiglitazone and pioglitazone was discussed in the FDA panel meeting.

I believe most of you are wondering whether there would be a revision of the outlook for the sales of Actos in the U.S. and also the total sales and profits on consolidated basis for the future following the outcome of the meeting. But this meeting lasted until six o'clock in the morning today, so in this respect is should say to be honest that outcome of the meeting is just today in the morning and we have not yet started the study of its potential impact on the sales of Actos. Therefore it is not feasible for us to make any comments at this point and I hope you understand this situation.

Thank you very much for your attention.

Next we would like to move to the Q&A session. And we're going to take questions both in English and Japanese. So operator, please start the session.

(OPERATOR INSTRUCTIONS). So Nomura Securities and we're having a question from Mr. Urushihara. Hello, yes, please go ahead.

My name is Urushihara from Nomura Securities. I have two questions and one question is that for SYR-322, how come Mr. Kitazawa has got this information that this is in last stage of Phase III? So I just wonder you exactly mean by this last stage of Phase III. Is all the patients that enrollment is completed and are you in a stage of analyzing the data. So can you give us an update on it?

So the patient enrollment, we have already completed them all is my understanding. But as you may know next step follows is that in case of six months taking in drugs then we need to wait six months until starting the data analysis. So please understand that we are in a progress of going onto this data analysis.

So can I understand that you are in a stage of data analysis?

So as you may know that we are doing a several -- number of trials in parallel but there is a difference in timing. So one -- a few of the trials are in a data analysis phase and the other trials are in the giving the drugs to the patients stage.

Okay, then probably this time around next year will be the time that you have completed the data analysis for the whole trial?

Well we regard this as the highest priority in our Company and we are putting in the various resources to this. So soon as possible we would like to file this drug.

In the past we have already said that we would like to file at the beginning of next year. We have already sent out this comment to everyone. So this time around next year probably. It's a bit hard to tell, but what I can say now is we are going to file as soon as possible starting in the U.S.

Okay, thank you very much. And a second question is that that 472, that is a back up drug, compared to 322. So what is advantage of 472 over 322 in terms of the profile?

At this point in time we are not in a stage of being able to disclose the profile. And as I've mentioned the second stage of our clinical Phase II is going to start going forward. And in animal testing we have seen that there's a strength and weakness depending on the pharmacological effect. But to the patients what kind of a feature will come out from the clinical tests, we would like to see that before we make some comments to you.

So unfortunately at this point in time we cannot comment on the profile. However of course as a back up and follow up, they will come out later in stage. So the one that is coming out later will not be the one that is exactly the same as the previous ones.

So when can I expect this Phase II to be completed?

So from the commonsense it probably it would take one and half years to two years. That is a usual period that is gong to be taken for the Phase II for this new drug discovery -- new drug testing. And our Company would like to shorten this time period as much as possible.

And our Company's basic time required for the starting of Phase II to the approval, we would like to complete them in five years. So how we can reduce this five years to a shorter period of time is what we are thinking at the moment.

Thank you very much.

Next question please.

From [Yakusi Nippon] Mr. [Ishii]. Please state your name.

(Inaudible) my name is Ishii. Regarding the share buy back, I read your announcement today. Previous time it was 38% and what is the reason of the share buyback and what is outlook regarding the share buyback [plan]?

This is Takahara speaking. We need to look at the economic situation and the market situation. We need to have a comprehensive perspective as we go ahead with the share buyback. The plan announced on the May 18 was 38%. It's not that high but the total from '06 is more than 50%. This year it is not going -- our plan is that is shouldn't be to long. We also announce JPY100b buyback and that is quite high and we would like to do our best to achieve our goals.

Thank you.

Next question please.

I would like to introduce the next questioner, which Mr. Yamaguchi from Nikko Citi.

My name is Yamaguchi from Nikko Citigroup. My first question is about the business performance. The first half, according to budget of that, I understand that your progress is 70%. So if you go to second quarter then your profit will be 40%. But you haven't touched upon your interim report, your interim forecast, so is there any reason why you haven't changed it?

So this is Takahara. Well this time, we haven't done any revision to our budget that was mentioned -- announced in May and the reason is as follows. This first quarter is the one that you are seeing there and as there're three reasons for this, the numbers. One is that a competitor of Actos, there is a problem about the safety, and a competitor to Amitiza, the competitor withdrew from the market. And due to those events we have seen the increase in our revenue coming from these two drugs. And the second reason is from the ForEx favorable situation. And a third is R&D progress, that in the first quarter we are slightly behind from the plan. So those are the three reasons why we are seeing more then anticipated progress versus our budget.

But this tendency, whether this will continue going forward or not, is something that we cannot foresee at the moment. And also as Mr. Kitazawa explained earlier, with regards to the outcome of the FDA advisory committee, we are going to analyze what will be the impact to our business going forward. So at this point in time we haven't changed to our business budget.

Can I ask you additional question?

Please go ahead.

After [February] the 20% increase in TPNA, and after the release of this document in May 21, I'm sure that your sale has gone out. So if possible I would like to know that the number of sales for April, May and June and what would be the increase from year on year basis for each month?

This is Takahara. From April to June in aggregate in local currency basis Actos family has seen 90% increase. And just for the month of June, 40% mark. Well 40% progress or increase that we're seeing. But that is a one time wholesaler's procurement may play a roll here. So we are currently analyzing that.

One last question. Maybe I have misheard this information but [Hematide] drug, you mentioned about there's a 783. Did I hear it wrong?

No that is not the case. I'm sorry -- excuse me, internally that is in a Phase II. But our disclosure principle is that that drug's to go into Phase II and also the first patient enrollment is confirmed, then we are disclosing this information to outside of the Company. So the first patients' enrollment to the Phase II hasn't been confirmed yet. So that's the reason why I wasn't mentioning about this today. But as soon as possible I would like to disclose information to you.

Thank you very much that's all from me.

Next question please.

From Schroder Securities, Mr. Tamura.

Miss Tamura actually. My name is Tamura from Schroder Securities. I have two questions, first about numbers. Operating profits breakdown chart, and TPNA SGA was the main reason for increase in the SGA expense increase. In terms of number of [MRs] and JPY12.4b, how much was that -- how much of that is related to personnel cost and labor cost?

This is Takahara speaking. The number of [MRs] in human resources expenses are not available today. JPY12.1b of which JPY10m is TPNA SGA increase, I hope you're satisfied with this answer.

Thank you very much. Another question, this is a question to Dr. Kitazawa. SYR-472, the slide says the back up compound and I think the position is that that's reserve when something happens with 322 or with DPP-4, is this mechanism action the generation changes?

As of now the both can be applicable. We have SYR-322. We don't anticipate any problem but of course we want to be ready when something happens. And also, as I explained before, the product profile compared to 322 should be better with the 472. We have the data suggesting that. Therefore the current profile of 472 should be confirmed at clinical level. Compared with SYR-322, if there are very big, significant characteristics, we would like to position this as the next generation DPP-4.

With 322, the combination drug with Actos was mentioned, and this SYR-472, it will be some time after the expiration. So, rather than combination drug, it's going to be a mono. As Actos combination drug 322 would be the core compound to be considered.

Naturally, we think of all the options in terms of the lifecycle management, additional indication, formulation changes and combination drugs. So, we would like to consider all the options.

First, we start with monotherapy on clinical basis, and there has been various discussion internally in the in-house so there are -- all those options are available. Yes.

Thank you very much.

Next question please?

I would like to introduce next questioner. Mr. Masuzoe-san from Deutsche Securities.

My name is Masuzoe from Deutsche Securities. There are several questions that I have, but the first one is about the committee issue. And from Mr. -- Dr. Kitazawa, mentioned that you wouldn't be able to know what would be the impact to your business unless you do this analysis. But say that FDA, over there, they're going to have this contra-indication to the [Avandia] or not, after all -- unless those will come, you were never to know what would be impact to your business?

Exactly so.

Then some of the panel members said that even with Avandia and Actos long-term data will be needed. Some panelists mentioned about this I understand. And your Company's release said that with the various data there is no approved material, product. But from FDA, if they request for the long-term data, or -- is there a possibility for FDA to requesting for this long-term data?

For Actos, we believe that there is no possibility for getting that kind of request. And hearing the advisory committee meeting that was held last night, as you may know, Avandia, they mentioned that from data wise it is inconclusive. In other words they said that they need to look for the longer-term data. That was mentioned from the -- a several number of committee members. But as for Takeda, for Actos, we already provided a long-term safety data, already to them.

The next thing is about numbers. Looking at the domestic sales, thinking about the interviews I had with you, just by looking at the first-quarter result, Blopress and [on Basen], I believe that you have mentioned about the flat revenue but that is a bit weak. But this first quarter, on domestic revenue, can I see this as a weak number? What I mean by that is versus the budget.

This is Takahara. At this point in time, the domestic sales, compared with the initial plan, we do not see that our sales is weaker compared with the budget. And I think that share is doing quite good. So, I, we haven't changed our initial forecast.

And then last question is about R&D cost. This is related to the Yamaguchi's question. The first quarter's JPY472 -- JPY47.2b and that means that you need to use JPY67.7b in the rest of the quarters. Is it possible for you to use them?

As I've mentioned, the development cost is increasing. And going forward, in-licensing plan is something that we are considering at the moment. So, at this point in time the R&D costs are JPY230b for the annual cost. We are not intending to change this budget.

Thank you very much.

Next question please?

(OPERATOR INSTRUCTIONS).

Do we have a question?

(OPERATOR INSTRUCTIONS). Next question from Mizuho Securities, Mr. [Tanaka].

My name is Tanaka from Mizouho Securities.

Yes. Go ahead.

I have two questions. Actoplus Met is being fired -- Actoplus Met XR, I understand the profile is being delayed. Now that the advisory committed is being held, and it's about time that approval will be granted. Is my expectation correct?

Let me answer to that question. Unfortunately, this is not the delay in the discussion at FDA, but a U.S. company to which we outsource this agent and GMP inspection is taking time. That's the reason for the delay. And for the other reviews, they are almost completed. That's the situation. And therefore, we feel if this GMP inspection is approved, then we think the approval will be soon granted.

Thank you. Next question?

Today, you do not mention this, but 475 and TAK-390MR, can you give us update? Any major changes?

No major changes to these two compounds [SYR-322] together with TAK-475 and 390MR, we put our max resource and we try to accelerate the process. And these are all at the late stage of Phase III.

Just one more question. Today, in the last page, you mentioned emerging technology to approach to drug discovery. And regarding the aptamers, it might not be quite possible for antibody drugs, your own products, and how will long will it take before we know the actual compound?

As soon as we know that. We are trying out best to accelerate our process. And in the mid-plan plan from '06 to 2010, we hope that we can announce that as soon as possible. That's one of our goals. So, within this five-year mid-term plan, we hope that we can introduce the compound structure, including becoming our products in the market.

Thank you very much.

(OPERATOR INSTRUCTIONS). Let me introduce the next questioner. Mita-san from Morgan Stanley Securities?

My name is Mita from Morgan Stanley Securities. On the TAK-475, in academic meetings, at least at last year, November last year, you've introduced with the Phase III data, so do you have any plan to do such kind of sharing of information?

This is Kitazawa. So, basic principle in disclosing information at academic meetings, I believe I have been mentioning this from the past, but for the field data in Phase III, for each drugs that are in approval process and if we are just before this granting of approval, then we would like to bring those drugs over to these academic meetings. So that's our principle. So, probably not only the 475 only, but 322 also, we hope that we will be able to bring those two drugs to the academic meetings.

Thank you. And Hematide, about the Hematide, can I ask you to give us an update?

The Enbrel drugs seem to cause some kind of confusion, overheat market.

So, with regards to the Hematide, Affymax has disclosed, their company's news release. And for the renal anemia, they said that their Phase III data as been outlined is completed. That means that they have to negotiate with the FDA and they are in the process of preparing their testing according to the protocols that they have agreed upon with the FDA. And probably the start of that trial will be from the later half of this year. And as a trial, they are going to have four trials, the studies. And the total patients will be 2,200. That's what they have released.

And on the other hand, the cancer area that Takeda is going to undertake, we are in a Phase II. And as you have mentioned, with regards to the Enbrel drugs, there is very severe responses that we're getting from FDA and the regulations. So in response to that we are currently in negotiation with FDA with that note.

Thank you very much. And your last question?

About the increase in SG&A, you mentioned that about JPY10b is in increase on this TPNA portion. Compared with the last year, the alliance fee to [Elineay] -- Eli Lilly, excuse me, so what will be the impact of that? If possible, I would like to know what was impact of that cooperation you had with the Eli Lilly?

This is Takahara. The co-promotion fee with Eli Lilly, so this is a number that we are not disclosing to the external parties, I'm sorry to say that. But when we had announced in May that TPNA's SG&A was -- is going to be restrained to the single digit of percentage increase, and there's no change to that. So this is just -- this information is just for your reference once again.

Thank you very much.

(OPERATOR INSTRUCTIONS).

Any more questions?

(OPERATOR INSTRUCTIONS). Next question from (inaudible) Capital Management, Mr. [Nakashima]. Go ahead with your question.

My name is Nakashima. On page seven of the conclusion, TPNA sales, Actos number was missing, [and totalling] $170m. And what was the increased portion?

And Actoplus Met and Duetact, do you have those numbers?

This is Takahara speaking. The total sales of the Actos family was JPY278m, JPY117m increase, of which Actoplus Met was JPY67m, JPY30m increase, Duetact, JPY4m. That's all.

Thank you very much. As I watched the FDA video, I saw good data of Actos. And that was presented in the meeting. And I suppose the situation now is positive news for you.

Thank you very much for your question.

Let me introduce the next questioner. Miyoshi-san from Merrill Lynch Securities.

Good afternoon. My name is Miyoshi from Merrill Lynch. I have one question. Earlier, the sales of Actos in the U.S. in June, you mentioned that there's an increase of 40%. And you mentioned that there is a wholesaler one-time procurement was included in that number. That means that Avandia -- does the wholesalers have this concern that Avandia may be withdrew from the market? Is that come earlier and is that the reason why you are seeing that wholesalers procuring the Actos for the one-time? Or is it because --

And also one other thing that I would like to know is that, what will be the price change that is happening with regards to the Actos?

This is Takahara speaking. So, because of the safety problem of Avandia, there might be an increase in demand for Actos. That may be the speculation that wholesalers are having and that's the reason why there is increase in the revenue of Actos. But with the -- that is the only reason that we are seeing the increase in Actos's sales, or is there any other reasons there in the market, is there something that we have to analyze going forward? So we cannot comment on it at this point in time.

So, for the recent past, when did you increase the price of Actos?

So, Actos price increase, the 5.9% increase in April. Actoplus Met a 9.9% increase happened in June.

Thank you very much.

Any other questions?

Next question is from Morgan Stanley Securities, Mr. Mita.

Sorry, this is [Tamura] speaking. I'm asking you a question once again. Let me review the Actos situation. Actos metanalysis was made and that was submitted, I heard, according to some (inaudible) report, what's the situation? When is that data going to be disclosed? Do you have any plans?

This is Kitazawa talking. Regarding metanalysis, at yesterday's advisory committee, FDA at the presentation and there was some mentioning of the Actos during the meeting. The first metanalysis, as of October last year, it was submitted already. As you know, this a metanalysis and there has been various clinical reports after that, being able to add those clinical data to come out with revised or new metanalysis. And also the analysis conducted by ourselves and also the FDA conducting metanalysis on the basis of their criteria. So, those are the possibilities.

And at the advisory committee this time around, FDA is aware of the necessity of that, but first pioglitazone should be considered with much effort. And therefore regarding to pioglitazone, they are not really having activities. But this year we submitted the data and also, based on the analysis of proactive studies, they do not feel that there are urgent needs to study that, according to the comments from FDA panelists.

(Inaudible), I don't fully understand yesterday's discussion, but as of now, what is required now, is regarding CHF, (inaudible), regarding Actos, that's the only requirement coming out. Is that right understanding?

Yes. You are right.

Thank you very much.

Because of the time constraint, I would like to invite the one last question. Is there anyone who would like to ask questions now?

(OPERATOR INSTRUCTIONS). I would like to introduce the next questioner. This is [Hasana] from Daiwa Securities.

One question. For the SYR-322, there are preceding drugs and it looks as if the preceding drugs have done (inaudible). So, can I understand that therefore SYR-322, all those apparent problems have already been tested in this drug?

Yes that's our understanding and that's the reason why we are saying that we are at the last stage of this development.

Thank you very much.

Thank you very much for your questions. Now, with this, we would like to close the conference call for the first quarter of the fiscal year 2007. Thank you very much for your participation.

Speaker statements on this transcript were Interpreted on the conference call by an Interpreter present on the live call. The Interpreter was provided by the Company sponsoring this Event.