Eisai Co., Ltd.

For the Alzheimer's disease treatment Leqembi (lecanemab), if the establishment of diagnosis and treatment pathways does not progress or if patient access is restricted, the company may not achieve the future revenue it expects. In the United States, maintenance therapy via intravenous administration and subcutaneous injection has already been approved, but there is a risk of delays in the progress of blood biomarkers and expansion into other countries. The company is responding by streamlining the pathway from diagnosis through treatment and monitoring, and by ensuring transparency through Value-based Pricing.

For the anticancer drug Lenvima (lenvatinib), if the expected results are not obtained in combination therapy clinical trials with Merck & Co., Inc., or if positioning changes due to the timing of competing product approvals, the company may fail to achieve its sales plan. In addition, Lenvima has been selected as a subject of the U.S. Medicare drug price negotiation program, and new prices are expected to be applied from January 2028, raising concerns about the impact on revenue. Furthermore, litigation regarding generic drug applications is ongoing, and there is a risk of generic drug entry before the expiration of the patent period.

Research and development of new drugs requires a long period of time and substantial investment, and development may be discontinued or suspended due to efficacy or safety issues. Even when favorable results are obtained in clinical trials, there is a risk that approval may not be granted or may be delayed in the regulatory review process of each country, and even after approval, if safety and efficacy cannot be verified through additional clinical trials, the approval may be revoked. The discontinuation or delay of development plans may result in the company not obtaining the revenue it had expected in the future; in the past, the Phase III trial of Lenvima (lenvatinib) in combination with pembrolizumab for metastatic non-small cell lung cancer failed to achieve its primary endpoint.

Governments in various countries, including Japan, the United States, Europe, and China, are introducing and strengthening measures to contain drug costs, and the company may not achieve the revenue it originally anticipated. In Japan, periodic drug price reductions and the promotion of generic drug use are being implemented, while in China, significant price reductions are being carried out through the centralized procurement system; Lenvima (lenvatinib) and Methycobal have both actually experienced price reductions. The company is working to promote appropriate recognition of innovation by calculating the social value of its drugs while keeping abreast of institutional and policy trends in each country.

After the expiration of the patent period and data protection period for originator drugs, revenue may decline significantly due to the entry of generic drugs, and there is also a risk that generic drugs may enter the market earlier than expected due to patent invalidation or non-establishment through invalidation trials. In the United States, litigation regarding generic drug applications related to Lenvima (lenvatinib) is ongoing, and depending on the outcome, generic drugs may enter the market before the expiration of the patent period, potentially causing a significant and rapid decline in market share. On the other hand, if the group's business activities infringe on third-party intellectual property rights, there is also a risk of receiving demands to cease business operations or claims for damages.

If supply chain disruptions occur due to raw material supply stoppages, manufacturing process issues, pandemics, geopolitical issues, major disasters, economic security issues, or other factors, product shortages, recalls, or sales suspensions may occur, potentially affecting patients' health and the company's business performance. There is also a risk that manufacturing costs may increase due to changes in tariff policy originating in the United States. The company has established a stable supply system through a quality control system compliant with global GMP standards, a multi-sourcing and multi-plant structure, and the maintenance of appropriate inventory levels based on its Business Continuity Plan (BCP).

Ransomware, targeted email attacks, and cyberattacks via the supply chain are becoming increasingly sophisticated and elaborate, and if personal information, undisclosed information, or confidential information shared with partner companies is leaked, altered, or lost, this could lead to legal liability, loss of competitive advantage, and damage to corporate trust. In particular, the leakage of undisclosed chemical structures at the drug discovery stage could directly affect patent applications and acquisitions. The group has established an information security system that includes compliance with global personal data protection regulations.

Regarding goodwill (balance at the end of FY2025 (ending March 2025): ¥259.2 billion) and intangible assets recognized through corporate acquisitions and the in-licensing of products and development compounds, if the recoverable amount falls below the book value due to divergence between plans and actual results or changes in market conditions, impairment losses may need to be recognized, adversely affecting business results and financial condition. Much of the goodwill is allocated to the Americas Pharmaceuticals Business, and the recoverable amount is affected by assumptions such as the approval and timing of new drugs and additional indications, drug prices and sales volumes, the status of competing products, and changes in interest rates. If these assumptions deteriorate, there is a risk that a significant impairment loss may occur.

The company utilizes partnerships in research and development, production, and sales activities, but if disagreements arise with partners or if partners face difficulties continuing their business or collaborating due to changes in the business environment, this could lead to delays or inefficiencies in activities, or unexpected cost burdens on partners, reducing planned profits. If differences in contract interpretation lead to litigation or arbitration, and the partnership is ultimately dissolved, there is also a risk that the company may not realize the future creation of new drugs or revenue it had expected. Changes in drug pricing and insurance systems in various countries may also have a significant impact on partnerships.

While the current Representative Executive Officer and CEO has exercised strong leadership for over 30 years, if the succession plan does not function appropriately or if preparations for unforeseen circumstances are insufficient, this could have a significant impact on the realization of the company's corporate philosophy and its management. In addition, if the company is unable to acquire, develop, and retain diverse talent who share empathy with the hhc philosophy, this could significantly impact innovation creation and the realization of the corporate philosophy. The Board of Directors regards CEO selection as the most critical decision-making matter and has established a system in which independent outside directors are involved in the development process.