Financial Data and Key Metrics Changes - Revenue in Q1 2025 was just over JPY 1,100 billion, a decrease of 8.4% or 3.7% at constant exchange rates [11] - Core operating profit decreased by 15.8% at actual FX or 11.9% at constant exchange rates, amounting to JPY 321.8 billion [11] - Reported operating profit increased by 11% to JPY 184.6 billion, mainly due to lower impairments and restructuring expenses [11][17] - Adjusted free cash flow was strong at JPY 190.1 billion [11] Business Line Data and Key Metrics Changes - Launch products, which represent 50% of revenue, grew by 5% at constant exchange rates [12] - In the GI segment, Entyvio grew by 4.9% at constant rates, with a 30% increase in active EntyvioPen patients in the U.S. [12][13] - TAKHZYRO continues to grow as a market leader in HAE prophylaxis, while the PDT portfolio experienced fluctuations typical of quarterly results [13] - QDenga was impacted by shipment timing and currency effects, but volume is increasing with expectations for strong growth [14] Market Data and Key Metrics Changes - The U.S. market saw a significant impact from Vyvanse's generic erosion, which was a main driver of the revenue decline [15][16] - The generic supply situation in the U.S. improved, leading to expectations of less headwind from Vyvanse in future quarters [15] - The appreciation of the Japanese yen against major currencies also posed a headwind this quarter [16] Company Strategy and Development Direction - The company views FY 2025 as pivotal due to a rapidly progressing late-stage pipeline, with positive results from pivotal Phase III studies of oviporexant [8][20] - The focus remains on late-stage development activities, with ambitions to file for up to five additional indications through FY 2029 [36] - The company is committed to maintaining a strong manufacturing presence in the U.S. and is exploring direct-to-consumer models for certain products [59][63] Management's Comments on Operating Environment and Future Outlook - Management anticipates that FY 2025 will be the last year of significant impact from Vyvanse erosion, with expectations for revenue growth to moderate in subsequent quarters [7][20] - The company is well-positioned to manage potential impacts from tariffs and is actively preparing for price negotiations related to Medicare [20][110] - Management remains confident in achieving full-year guidance despite the challenges faced in Q1 [42][46] Other Important Information - The company executed two leverage-neutral bond issuances to streamline its maturity profile [18] - The company plans to file for U.S. approval of oviporexant later this year, with regional filings to follow [27] - The company is exploring the potential of orexin agonists in various disorders beyond narcolepsy, including sleep-wake cycle disruptions and metabolism [77] Q&A Session Summary Question: Expectations for recovery in sales of specific products - Management acknowledged that Q1 was soft but does not reflect the underlying dynamics, expecting recovery as market access improves [42][44] Question: Additional benefits of new molecules in the pipeline - Management indicated that the new orexin agonist has potential for broader applications beyond narcolepsy, with ongoing development in various disorders [47][49] Question: Competitive landscape for narcolepsy treatments - Management expressed confidence in the competitive positioning of oviporexant, highlighting significant improvements in key symptoms [57][58] Question: Investment strategies in the U.S. market - Management confirmed ongoing investments in U.S. manufacturing and R&D, emphasizing the importance of the U.S. market for future growth [59][60] Question: Dynamics affecting Entyvio's market performance - Management noted challenges in transitioning patients to the pen formulation but expects improvements as access issues are addressed [86][88] Question: R&D spending outlook - Management clarified that Q1 spending was in line with plans, with expectations for increased R&D activities as new trials commence [72][106] Question: Most Favored Nation drug pricing policy discussions - Management is preparing for potential negotiations related to the MFN policy but has not yet been contacted for direct discussions [109][110] Question: Preparations for the launch of oviporexant - Management is focusing on building a sales team and utilizing digital technology for diagnostics leading up to the launch [113]