エーザイ（4523） – CONSOLIDATED FINANCIAL REPORT [IFRS] for Fiscal 2021 (Year Ended March 31, 2022)

CONSOLIDATED FINANCIAL REPORT [IFRS] for Fiscal 2021 (Year Ended March 31, 2022)May 13, 2022 Eisai Co., Ltd. Stock exchange listing: Tokyo Stock Exchange (TSE) TSE Code: 4523 URL: https://www.eisai.com Representative: Haruo Naito, Representative Corporate Officer & CEO Contact: Sayoko Sasaki, Vice President, Chief IR Officer & Stakeholder Communications Telephone: +81-3-3817-5120 Expected date of ordinary general meeting of shareholders: June 17, 2022 Expected date of annual report submission: June 17, 2022 Expected date of dividend payment commencement: May 25, 2022 Preparation of annual supplementary explanatory material: Yes Annual results briefing held: Yes 1. Consolidated Annual Financial Results (April 1, 2021 – March 31, 2022)(1) Consolidated Operating Results(Figures are rounded to the nearest million yen) (Percentage figures show year on year change) Profit for the year attributable to owners of the parent Comprehensive income for the year Revenue Operating profit Profit for the year Profit before income taxes (¥ million) (%) (¥ million) (%) (¥ million) (%) (¥ million) (%) (¥ million) (%) (¥ million) FY 2021 756,226 17.1 53,750 4.3 54,458 4.1 45,717 8.1 47,954 14.3 90,777 FY 2020 645,942 -7.151,511 -59.052,296 -59.242,306 65.541,942 65.670,853 Earnings per share attributable to owners of the parent (basic) Earnings per share attributable to owners of the parent (diluted) (¥) 167.27 146.34 (¥) 167.25 146.29 FY 2021 FY 2020 (Reference) Equity in earnings of affiliates: for FY 2021: -¥160 million, for FY 2020: -¥203 million–Profit ratio to equity attributable to owners of the parent Profit before income taxes ratio to total assets Operating profit ratio to revenue (%) 6.6 6.1 (%) 4.7 4.9 (%) 28.1 26.3-(%) 7.1 8.0 (2) Consolidated Financial PositionAs of March 31, 2022 As of March 31, 2021 (3) Consolidated Cash FlowsTotal assets Total equity Equity attributable to owners of the parent (¥ million) 1,239,315 1,088,427 (¥ million) 771,534 726,360 (¥ million) 748,821 701,601 Ratio of equity attributable to owners of the parent (%) 60.4 Equity per share attributable to owners of the parent (¥) 2,611.82 64.5 2,447.45 Operating activities Investing activities Financing activities Cash and cash equivalents at end of year (¥ million) 117,590 73,067 (¥ million) -28,848-36,086(¥ million) -48,967-55,908(¥ million) 309,633 248,740 FY 2021 FY 2020 1 2. Dividends Annual dividend per share End of Q1 End of Q2 (¥) End of Q3 (¥) Total Total dividends (¥) (¥ million) Dividend payout ratio (consolidated) Dividend on equity attributable to owners of the parent ratio (consolidated) (%) FY 2020 FY 2021 FY 2022 (Forecast) — — — (¥) 80.00 80.00 80.00 — — — End of FY (¥) 80.00 80.00 160.00 160.00 80.00 160.00 45,873 45,881 (%) 109.3 95.7 100.7 6.6 6.3 3. Consolidated Financial Forecast for Fiscal 2022 (April 1, 2022 – March 31, 2023) (Percentage figures show year on year change) Earnings per share attributable to owners of the parent (basic) Profit for the year attributable to owners of the parent Profit before income taxes Profit for the year Operating profit (¥ million) (%) (¥ million) (¥ million) (¥ million) (%) (%) (%) (%) (¥) 700,000 -7.4 55,000 2.3 55,500 1.9 46,500 1.7 45,500 -5.1 158.85 Revenue (¥ million) Fiscal Year * Explanatory Notes (1) Changes in number of significant subsidiaries during the year (changes in specified subsidiaries resulting in a change in scope of consolidation): No (2) Changes in accounting policies and accounting estimates: 1) Changes in accounting policies required by IFRS: Yes 2) Changes in accounting policies other than 1): Yes 3) Changes in accounting estimates: No (3) Number of shares issued (common shares): 1) Number of shares issued (including treasury shares) As of March 31, 2022 296,566,949 As of March 31, 2021 296,566,949 2) Number of treasury shares As of March 31, 2022 9,801,133 As of March 31, 2021 9,839,021 3) Weighted average number of shares outstanding For FY 2021 286,685,347 For FY 2020 286,616,063 The Company’s shares held through a trust (61,510 shares) are not included in the number of treasury shares as of the end of this fiscal year, but are included in the average number of shares outstanding as treasury shares that are deducted from the calculation of earnings per share. 2FY 2021 FY 2020 FY 2021 FY 2020 (Reference) Non-consolidated Annual Financial Results (April 1, 2021 – March 31, 2022) (1) Non-consolidated Operating Results (Percentage figures show year on year change) Net sales Operating income Ordinary income Net income (¥ million) (%) (¥ million) 417,134 345,726 20.7 -24.8 14,588 7,135 (%) 104.5 -93.4 (¥ million) 14,074 8,398 (%) 67.6 -93.1 (¥ million) 6,741 7,049 (%) -4.4 -94.0 Basic earnings per share Diluted earnings per share (¥) 23.51 24.59 (¥) 23.51 24.59 (2) Non-consolidated Financial Positions As of March 31, 2022 As of March 31, 2021 (Reference) Shareholders’ equity: Total assets Equity (¥ million) 822,250 746,603 (¥ million) 465,938 507,021 Shareholders’ equity ratio Shareholders’ equity per share (%) 56.7 67.9 (¥) 1,625.06 1,768.50 As of March 31, 2022 ¥465,911 million * This financial report is not subject to audit procedures by independent auditors. March 31, 2021 ¥506,968 million * Explanation concerning the appropriate use of results forecast and other special instructions: (Caution concerning forward-looking statements) Materials and information provided in this financial disclosure may contain “forward-looking statements” based on expectations, business goals, estimates, forecasts and assumptions that are subject to risks and uncertainties as of the publication date of these materials. Accordingly, actual outcomes and results may differ materially from these statements depending on a number of important factors. Please refer to pages 16, 53-63 for details with regard to the assumptions and other related matters concerning the consolidated financial forecast. (Methods for obtaining supplementary materials and content of financial results disclosure meeting) Supplementary materials are attached to this financial report. The Company plans to hold a financial results disclosure meeting for institutional investors and securities analysts on Friday, May 13, 2022. The handouts from the disclosure meeting will be made available on the Company’s website after the event. 3Supplemental Materials: Table of Contents 1. Overview of Operating Results and Other Information (Page) 1) Overview of Operating Results and Financial Position for Fiscal 2021 (1) Overview of Operations (2) Overview of Operating Results (3) Overview of Financial Position 9 (4) Research & Development Pipeline, Alliances, and Other Events ･･･････････ 10 ･･･････････ 16 2) Outlook for the Future 3) Basic Policy on Profit Appropriation and Dividend for Fiscal 2021/22 ･･･････････ 17 ･･･････････ ･･･････････ ･･･････････ 5 6 2. Management Policy 1) Corporate Mission 2) Medium- to Long-Term Corporate Management Strategy and Issues that Need to be Addressed 3) Basic Policy for Capital Strategy 4) Enhancing Non-Financial Value including ESG and Information Disclosure 5) Compliance and Risk Management 3. Basic Approach to the Selection of Accounting Standards 4. Consolidated Financial Statements and Major Notes 1) Consolidated Statement of Income 2) Consolidated Statement of Comprehensive Income 3) Consolidated Statement of Financial Position 4) Consolidated Statement of Changes in Equity 5) Consolidated Statement of Cash Flows 6) Notes to Consolidated Financial Statements (Going Concern) (Basis of Preparing Consolidated Financial Statements) (Significant Accounting Policies) (Significant Accounting Estimates and Judgments) (Segment Information) (Consolidated Statement of Income) (Earnings Per Share) (Consolidated Statement of Cash Flows) (Business Combinations) (Significant Subsequent Events) ･･･････････ 17 ･･･････････ 17 ･･･････････ 20 ･･･････････ 21 ･･･････････ 22 ･･･････････ 22 ･･･････････ 23 ･･･････････ 24 ･･･････････ 25 ･･･････････ 27 ･･･････････ 29 ･･･････････ 30 ･･･････････ 30 ･･･････････ 32 ･･･････････ 44 ･･･････････ 45 ･･･････････ 47 ･･･････････ 50 ･･･････････ 51 ･･･････････ 51 ･･･････････ 52 5. Other 1) Forecasts and Risk Factors 2) Overview of the Eisai Group 3) Proposed Changes in Directors and Corporate Officers ･･･････････ 53 ･･･････････ 64 ･･･････････ 67 41．Overview of Operating Results and Other Information 1) Overview of Operating Results and Financial Position for Fiscal 2021 (1) Overview of Operations 〇 Based on a medium-term “EWAY Future & Beyond” which started in April 2021, Eisai Co., Ltd. (“the Company”) and its affiliates (collectively referred to as “the Group”) expand the perspective from “patients and their families” to “patients and the general public” and aim to build an ecosystem by collaborating with other industries in order to provide solutions for relieving anxiety over health. 〇 In the neurology area, regarding anti-amyloid beta protofibril antibody lecanemab, a rolling submission to the U.S. Food and Drug Administration (FDA) of a Biologics License Application (BLA) has been completed in May 2022 and we are aiming to obtain accelerated approval in 2022. We are aiming to obtain the primary endpoint data from Clarity AD (Phase III study) for the treatment of early Alzheimer’s disease (AD) in the fall of 2022. Patient enrollment in AHEAD 3-45 (Phase III study) for preclinical (asymptomatic) AD is progressing steadily. Regarding insomnia treatment Dayvigo, we are expanding the launch countries. For antiepileptic agent Fycompa, we are adding new indications. In addition, we are aiming to provide high-quality drugs and medical services throughout China via one-stop online health platform for dementia which has been established in collaboration with JD Health in China. 〇 In the oncology area, revenue for anticancer agent Lenvima became ¥192.3 billion, increasing significantly compared to revenue in the previous fiscal year as a result of enhanced patient contribution through obtaining approvals in combination with the anti-PD-1 antibody pembrolizumab of Merck & Co., Inc., Rahway, NJ, USA for renal cell carcinoma and endometrial carcinoma in Japan, the United States, Europe, Asia and others. Also, we have entered into an exclusive global strategic collaboration agreement with Bristol Myers Squibb (the U.S.) for MORAb-202, an antibody drug conjugate developed by Eisai, and are conducting co-development. 5(2) Overview of Operating Results [Revenue and Profit] 〇 The Group recorded the following consolidated financial results for the fiscal year from April 1, 2021 to March 31, 2022. (¥billion) FY 2020 FY 2021 Year on year change (%) 645.9 161.3 484.6 281.6 150.3 1.5 51.5 52.3 42.3 41.9 70.9 171.7 114.2 14.6 1009.8 756.2 174.8 581.4 366.4 53.7 54.5 45.7 48.0 117.1 108.4 120.0 130.1 104.3 104.1 108.1 114.3 Revenue Cost of sales Gross profit Selling, general and administrative expenses Research and development expenses Other income Operating profit Profit before income taxes Profit for the year Profit for the year attributable to owners of the parent Comprehensive income for the year Earnings per share attributable to owners of the parent (basic) (yen) 90.8 128.1 ¥146.34 ¥167.27 114.3 〇 The Group’s revenue increased significantly primarily due to the continuous growth of global brands such as Lenvima and an upfront payment of ¥49.6 billion from Bristol Myers Squibb under strategic collaboration for MORAb-202 as well as increase in sales milestone payments from Merck & Co., Inc., Rahway, NJ, USA (¥69.2 billion in this fiscal year and ¥20.7 billion in the previous fiscal year). 〇 Regarding revenue from global brands, revenue for Lenvima, anticancer agent Halaven, Fycompa and Dayvigo was ¥192.3 billion (143.6% year on year), ¥39.4 billion (104.8% year on year), ¥31.9 billion (119.2% year on year) and ¥16.4 billion (¥3.1 billion in the previous fiscal year), respectively. 〇 While cost of sales increased mainly due to recording of impairment losses related to sales rights of Alzheimer’s disease treatment ADUHELM (aducanumab) reflecting revision of demand forecast following business circumstance changes, cost of sales ratio decreased due to increase in license revenue and improvement in product mix. 6〇 Selling, general and administrative expenses increased significantly mainly due to the shared profit paid to Merck & Co., Inc., Rahway, NJ, USA following Lenvima’s revenue growth as well as increase in launch cost of ADUHELM and recording of cost reflecting revision of demand forecast for ADUHELM. 〇 Although research and development (R&D) expenses were controlled through the partnership model including recording of regulatory milestone payments for Lenvima from Merck & Co., Inc., Rahway, NJ, USA as reimbursement, R&D expenses increased significantly mainly due to revision of R&D pipeline by EA Pharma Co., Ltd. (Tokyo, hereinafter “EA Pharma”), a consolidated subsidiary of the Company, as well as aggressive resource investment mainly in lecanemab and Lenvima. 〇 Other income increased significantly due to divestiture of rights for antiepileptic agent Zonegran in Europe, the Middle East, Russia and Australia. 〇 As a result of the above, operating profit and profit for the year increased. [Performance by Segment] (Revenue for each segment indicates revenue from external customers) The Group’s business is comprised of pharmaceutical business and other business. The pharmaceutical business is organized into the following six reporting segments in this report: Japan, Americas (North America), China, EMEA (Europe, the Middle East, Africa, Russia and Oceania), Asia and Latin America (primarily South Korea, Taiwan, Hong Kong, India, ASEAN, Central and South America) and OTC and others (Japan). 〇 Total revenue came to ¥214.0 billion (92.3% year on year), with a segment profit of ¥61.2 billion (73.0% year on year). Revenue and profit decreased mainly due to impact of launch of generics for Lyrica, a pain treatment being co-promoted with Pfizer Japan Inc., transfer of rights for anticancer agent Treakisym which took place in December 2020 due to expiration of the business alliance and drug price revision. 〇 Regarding revenue by products, from neurology products, revenue for Dayvigo and Aricept, a treatment for Alzheimer’s disease dementia, came to ¥12.7 billion (¥2.0 billion in the previous fiscal year) and ¥6.9 billion (74.1% year on year), respectively. Revenue for insomnia treatment Lunesta totaled ¥6.9 billion (49.2% year on year) and co-promotion revenue for Lyrica totaled ¥5.7 billion (26.6% year on year), while revenue for Fycompa was ¥5.4 billion (105.2% year on year). Among oncology products, revenue for Lenvima and Halaven came to ¥10.3 billion (84.9% year on year) and ¥8.3 billion (98.3% year on year), respectively. Fully human anti-TNF-α monoclonal antibody Humira earned revenue of ¥50.6 billion (97.5% year on year). 〇 Anticancer agent Remitoro was launched in May 2021. 〇 Anticancer agent Tazverik was launched in August 2021. 7 〇 Total revenue came to ¥172.0 billion (120.5% year on year), with a segment profit of ¥79.2 billion (122.5% year on year). 〇 Regarding revenue by products, from neurology products, revenue for Fycompa came to ¥14.6 billion (119.4% year on year) achieving growth. Revenue for antiepileptic agent Banzel was ¥7.0 billion (36.9% year on year). Among oncology products, Lenvima and Halaven both achieved growth earning revenue of ¥116.5 billion (143.8% year on year) and ¥14.3 billion (113.5% year on year), respectively. In July 2021, an upfront payment was recorded in revenue due to divestiture of rights in the U.S. for proton pump inhibitor Aciphex. 〇 Revenue totaled ¥106.4 billion (125.1% year on year), with a segment profit of ¥55.4 billion (137.3% year on year). 〇 Regarding revenue by products, revenue for Lenvima totaled ¥35.0 billion (189.6% year on year) achieving significant growth following expansion of access to medicine due to listing on the National Reimbursement Drug List. Revenue for peripheral neuropathy treatment Methycobal was ¥12.5 billion (71.4% year on year) due to sales price reduction as a result of application of the government’s centralized procurement system. Liver disease and anti-allergy agents Stronger Neo-Minophagen C and Glycyron Tablets together recorded ¥9.5 billion (94.1% year on year). Proton pump inhibitor Pariet earned ¥8.9 billion (132.5% year on year) achieving significant growth. In September 2021, an upfront payment was recorded in revenue due to divestiture of rights in China for metabolic cardiotonic agent Neuquinon. 〇 Revenue totaled ¥59.3 billion (107.4% year on year). A segment profit totaled ¥40.9 billion (159.3% year on year) due to divestiture of rights for Zonegran. 〇 Regarding revenue by products from neurology products, revenue for Fycompa came to ¥9.2 billion (121.1% year on year) achieving growth. Among oncology products, Lenvima/Kisplyx and Halaven both achieved growth earning revenue of ¥21.8 billion (137.6% year on year) and ¥12.8 billion (103.8% year on year), respectively. 〇 Dayvigo was launched in Australia in September 2021. 〇 Revenue totaled ¥50.6 billion (110.3% year on year), with a segment profit of ¥20.8 billion (111.6% year on year). 〇 Regarding revenue by products, Lenvima achieved significant growth, recording revenue of ¥8.8 billion (135.4% year on year). Revenue for Aricept came to ¥11.9 billion (110.1% year on year). Revenue for Humira came to ¥7.5 billion (88.1% year on year). 〇 Dayvigo was launched in Hong Kong in June 2021. 〇 Bile acid transporter inhibitor Goofice was launched in Thailand in July 2021. 〇 Halaven was launched in Vietnam in November 2021. 8< OTC and others business> 〇 Revenue totaled ¥23.8 billion (94.7% year on year), with a segment profit of ¥4.7 billion (92.7% year on year). 〇 Revenue for Chocola BB Group came to ¥14.3 billion (106.4% year on year) achieving growth, while revenue for Etak Group including Etak Antimicrobial Spray α decreased. (3) Overview of Financial Position [Assets, Liabilities, and Equity] 〇 Total assets as of the end of the year amounted to ¥1,239.3 billion (up ¥150.9 billion from the end of the previous fiscal year). Cash and cash equivalents increased due to receiving of an upfront payment, reimbursement for R&D payment under strategic collaboration with Bristol Myers Squibb as well as receiving of sales milestone payments from Merck & Co., Inc., Rahway, NJ, USA. Also, trade and other receivables increased due to recording of a sales milestone payment from Merck & Co., Inc., Rahway, NJ, USA. 〇 Total liabilities as of the end of the year amounted to ¥467.8 billion (up ¥105.7 billion from the end of the previous fiscal year). Accrued expenses to Biogen Inc. (the U.S., hereinafter “Biogen”) and Merck & Co., Inc., Rahway, NJ, USA increased. Also, other financial liabilities increased due to recording of reimbursement for R&D payment from Bristol Myers Squibb as deposits received. 〇 Total equity as of the end of the year amounted to ¥771.5 billion (up ¥45.2 billion from the end of the previous fiscal year). Exchange differences on translation of foreign operations increased due to depreciation of yen. 〇 As a result of the above, the ratio of equity attributable to owners of the parent was 60.4% (down 4.0 percentage points from the end of the previous fiscal year). [Cash Flows] 〇 Net cash from operating activities amounted to an inflow of ¥117.6 billion (up ¥44.5 billion from the previous fiscal year) mainly due to receiving of an upfront payment and reimbursement for R&D payment under strategic collaboration with Bristol Myers Squibb. 〇 Net cash used in investing activities amounted to an outflow of ¥28.8 billion (down ¥7.2 billion from the previous fiscal year). While there were capital expenditures following the expansion of research facilities and production facilities, proceeds from sale of property, plant and equipment and intangible assets were recorded due to divestiture of rights for Zonegran. 〇 Net cash used in financing activities amounted to an outflow of ¥49.0 billion (down ¥6.9 billion from the previous fiscal year), mainly due to dividends paid. 〇 As a result of the above, cash and cash equivalents as of the end of the year stood at ¥309.6 billion (up ¥60.9 billion from the end of the previous fiscal year). Free cash flow (cash flow from operating activities less capital expenditures) for the year was inflow of ¥88.7 billion and cash generated exceeded the amount of dividend significantly. 9(4) Research & Development Pipeline, Alliances, and Other Events [Status of Ongoing Research & Development Pipeline] 〇 Anticancer agent Lenvima (product name for renal cell carcinoma indication in Europe: Kisplyx, lenvatinib, jointly developed with Merck & Co., Inc., Rahway, NJ, USA) Approved for use in the treatment of thyroid cancer (monotherapy) in over 80 countries including Japan, the United States, in Europe, China and in Asia. Approved for use in the (first-line) treatment of hepatocellular carcinoma (monotherapy) in over 75 countries including Japan, the United States, in Europe, China and in Asia. Approved for use in the treatment of unresectable thymic carcinoma (monotherapy) in Japan. Approved in combination with everolimus for use in the treatment of renal cell carcinoma (second-line) in over 60 countries, including the United States and in Europe. The agent obtained approval (including conditional approval) in combination with the anti-PD-1 therapy pembrolizumab from Merck & Co., Inc., Rahway, NJ, USA for use in the treatment of endometrial carcinoma (following prior systemic therapy) in over 45 countries including Japan, the United States, in Europe and in Asia. In July 2021, the combination therapy was approved in the United States for the treatment of patients with advanced endometrial carcinoma that is not microsatellite instability-high (MSI-H) or mismatch repair deficient (dMMR), who have disease progression following prior systemic therapy in any setting and are not candidates for curative surgery or radiation, based on Study 309/KEYNOTE-775 (Phase III study). In Europe, the combination therapy with pembrolizumab was approved in November 2021 for the treatment of adult patients with advanced or recurrent endometrial carcinoma who have disease progression on or following prior treatment with a platinum-containing therapy in any setting and are not candidates for curative surgery or radiation. In Japan, the combination therapy with pembrolizumab was approved in December 2021 for the treatment of unresectable, advanced or recurrent endometrial carcinoma that progressed after cancer chemotherapy. In February 2022, the combination therapy was approved in Taiwan for the treatment of patients with advanced endometrial carcinoma who have disease progression following prior systemic therapy in any setting and are not candidates for curative surgery or radiation. Approved in combination with pembrolizumab for use in the treatment of renal cell carcinoma (first-line) in over 35 countries, including Japan, the United States, in Europe and in Asia. The combination therapy was approved for the first-line treatment of adult patients with advanced renal cell carcinoma in the United States in August 2021, in Europe in November 2021 and in Taiwan in January 2022. The combination therapy was also approved for the treatment of radically unresectable or metastatic renal cell carcinoma in Japan in February 2022. Regarding studies of the agent in combination with pembrolizumab, respective Phase III studies for endometrial carcinoma (first-line), hepatocellular carcinoma (first-line), melanoma (first-line), nonsquamous non-small cell lung cancer (first-line, in combination with chemotherapy), non-small cell lung cancer (second-line), head and neck cancer (first-line), hepatocellular carcinoma (first-line, in combination with transcatheter arterial chemoembolization), gastric cancer (first-line, in combination with chemotherapy), 10colorectal cancer (non-MSI-H / mismatch repair proficient [pMMR], third-line) are underway in the United States, Europe and other countries. A Phase III study for esophageal carcinoma (first-line, in combination with chemotherapy) has been initiated and is underway in Japan, the United States, Europe and China. Regarding two Phase III studies for PD-L1 positive non-small cell lung cancer (first-line) and cisplatin-ineligible bladder cancer (first-line), the studies were discontinued following the recommendation of the external Data Monitoring Committee. Regarding studies of the agent in combination with pembrolizumab, Phase II studies formelanoma (second-line) and head and neck cancer (second-line), as well as a Phase IIbasket trial in multiple cancer types are underway in the United States, Europe and othercountries. The company received a notification in the United States from the U.S. Food and DrugAdministration (FDA) regarding rescindment of Breakthrough Therapy designation tolenvatinib in combination with pembrolizumab, for the first-line treatment of patients withadvanced hepatocellular carcinoma not amenable to locoregional treatment, followingavailability of another combination therapy for the same indication.〇 Anticancer agent Halaven (eribulin) Approved for use in the treatment of breast cancer in over 80 countries including Japan,the United States, in Europe, China and in Asia. Approved for use in the treatment of liposarcoma (soft tissue sarcoma in Japan) in over80 countries, including Japan, the United States, in Europe and in Asia. A Phase I/II study for the combination therapy of the liposomal formulation of Halavenand anti-PD-1 antibody nivolumab of Ono Pharmaceutical Co., Ltd. (Osaka, Japan) isunderway in Japan.〇 Antiepileptic agent Fycompa (perampanel) Approved in over 70 countries including Japan, the United States, in Europe, China andin Asia, as an adjunctive therapy for use in the treatment of partial-onset seizures inpatients with epilepsy 12 years of age and older. The agent was approved formonotherapy and adjunctive use in the treatment of partial-onset seizures in patientswith epilepsy 4 years of age and older in Japan and the United States. The agent wasapproved for adjunctive use in the treatment of partial-onset seizures in patients withepilepsy 4 years of age and older in Europe. Approved in over 70 countries including Japan, the United States, in Europe and in Asia,as an adjunctive therapy for use in the treatment of primary generalized tonic-clonicseizures in patients with epilepsy 12 years of age and older. The agent was approvedan adjunctive therapy for primary generalized tonic-clonic seizures in pediatric patientswith epilepsy 7 years of age and older in Europe. Approved in China in July 2021 for two indications as a monotherapy for partial-onsetseizures and an adjunctive treatment / a monotherapy for pediatric indication for partialonset seizures in patients with epilepsy 4 years of age and older. A Phase III study for Lennox-Gastaut syndrome is underway in Japan, the United Statesand Europe.11 〇 Orexin receptor antagonist Dayvigo (lemborexant) The agent was approved for the treatment of insomnia in more than 10 countries including Japan, the United States and countries in Asia. A Phase III study for insomnia is underway in China. A Phase II study for irregular sleep-wake rhythm disorder associated with Alzheimer’s disease dementia is finished and consideration for future development is underway. 〇 Anti-amyloid beta protofibril antibody lecanemab (development code: BAN2401, jointly developed with Biogen) The agent was granted Breakthrough Therapy designation for Alzheimer’s disease (AD) treatment in June 2021 and Fast Track designation in December 2021 in the United States. A rolling submission to the FDA of a Biologics License Application (BLA) for the treatment of early AD (mild cognitive impairment due to AD or mild AD) was initiated in the United States in September 2021 by utilizing the accelerated approval pathway based on Study 201 (Phase II study) and has been completed in May 2022. In March 2022, a submission of application data to the Pharmaceuticals and Medical Devices Agency (PMDA) under the prior assessment consultation system has been Clarity AD (Phase III study) in patients with early AD is underway in Japan, the United initiated in Japan. States, Europe and China. AHEAD 3-45 (Phase III study) for preclinical (asymptomatic) AD is underway in countries including Japan, the United States and in Europe. In this study, the agent has been selected by the Alzheimer’s Clinical Trials Consortium (ACTC) as a treatment to be evaluated. 〇 Alzheimer’s disease (AD) treatment ADUHELM (aducanumab, jointly developed based on sole decision making rights of Biogen) In June 2021, the agent was granted accelerated approval as AD treatment in the United States. Biogen will conduct confirmatory trial necessary for the continued approval for In December 2021, additional data were requested on the application for the manufacturing and marketing approval and the application needed to be deliberated this indication. continuously in Japan. In April 2022, Biogen withdrew Marketing Authorization Application in Europe. 〇 In June 2021, anticancer agent Tazverik (tazemetostat, development code: E7438) obtained manufacturing and marketing approval for the treatment of EZH2 gene mutation-positive follicular lymphoma in Japan. 〇 In September 2021, fully human anti-TNFα monoclonal antibody Humira (adalimumab) obtained additional approvals in Japan for high-dose regimen of ulcerative colitis in adult patients and a new regimen in pediatric patients. 12〇 In March 2022, Carogra (carotegrast methyl, development code: AJM300) has obtained manufacturing and marketing approval for treatment of ulcerative colitis in Japan. The agent has been jointly developed by EA Pharma and Kissei Pharmaceutical Co., Ltd. (Nagano, 〇 A Phase III study of dotinurad, a selective urate transporter (URAT1) inhibitor, for gout has Japan). been initiated in China. 〇 The Tau NexGen study (Phase II/III study) assessing the effect of anti-microtubule binding region (MTBR) tau antibody E2814 in dominantly inherited AD has been initiated in the United States by the Dominantly Inherited Alzheimer Network Trials Unit (DIAN-TU) which is led by Washington University School of Medicine in St. Louis (U.S.). Lecanemab has been selected as the background anti-amyloid agent in this study. 〇 A Phase I/II study of anticancer agent E7386 in combination with pembrolizumab for solid tumors has been initiated in Japan and the United States. 〇 A Phase I/II study of Toll-Like Receptor (TLR) 7/8 inhibitor E6742 for systemic lupus erythematosus has been initiated in Japan. 〇 The development of anticancer agent MORAb-009 for mesothelioma which was at Phase I/II stage in the United States and Europe has been finished. 〇 Due to business priorities, EA Pharma is no longer progressing the development at Phase I/II stage in Japan of EA4000 as bowel cleansing agent. 〇 Due to business priorities, EA Pharma is no longer progressing the development at Phase II stage in Japan of E6007 as ulcerative colitis treatment. 〇 Due to business priorities, EA Pharma is no longer progressing the Phase II study in Japan and Europe of E6011 as treatment for Crohn’s disease. [Major Alliances, Agreements and Other Events] ○ In April 2021, Eisai entered into a business alliance agreement with Saitama Resona Bank, Limited (Saitama, Japan) for building an ecosystem with the aim of supporting people living with and preventing dementia in Saitama Prefecture. ○ In May 2021, Eisai entered into a joint R&D agreement with the National Cancer Center Japan (Tokyo) concerning “Basic research on the drug discovery and development to accelerate development of anticancer drugs in treatment of patients with rare cancers and refractory cancers” and commenced research activities. ○ In May 2021, Eisai entered into a business alliance agreement with ITO EN, LTD. (Tokyo) concerning the initiatives for supporting people living with and preventing dementia with the aim of realizing a healthy and long-lived society. ○ In June 2021, Eisai entered into an agreement to divest its rights for antiepileptic agent Zonegran in Europe, the Middle East, Russia and Australia to Advanz Pharma (U.K.). ○ In June 2021, Eisai entered into an exclusive global strategic collaboration agreement with Bristol Myers Squibb for the co-development and co-commercialization of MORAb-202, an antibody drug conjugate developed by Eisai. ○ In August 2021, Eisai established Eisai Israel Ltd. in Tel Aviv, Israel as a pharmaceutical sales subsidiary of Eisai Europe Ltd., Eisai’s subsidiary in the United Kingdom. 13○ In August 2021, Eisai entered into a license agreement with FUJI YAKUHIN CO., LTD. (Saitama, Japan) for development and distribution of dotinurad which was discovered by FUJI YAKUHIN in Indonesia, Malaysia, Myanmar, the Philippines, and Thailand. ○ In September 2021, Eisai joined “RE100”, the global environmental initiative that aims to shift the electricity used in business activities to 100% renewable electricity. ○ In November 2021, Eisai launched a collaborative cultivation program with dementia-related startup with Digital Garage, Inc. (Tokyo). ○ In November 2021, Eisai entered into a License Agreement granting the exclusive rights for global research, development, manufacture and sale of the investigational anticancer agent H3B-8800, which is being developed as a splicing modulator compound, to a subsidiary of Roivant Sciences Ltd. (U.K.). ○ In November 2021, Eisai entered into a business alliance agreement with FCNT LIMITED (Kanagawa) aiming to support people living with dementia and to prevent dementia through developing solutions for maintaining brain performance. ○ In December 2021, Eisai entered into an agreement with Gilead Sciences, Inc. (U.S.) for the commercialization and distribution of filgotinib, a JAK (Janus kinase) inhibitor, for indications of rheumatoid arthritis, ulcerative colitis, and Crohn’s disease in South Korea, Taiwan, Hong Kong and Singapore. ○ In December 2021, Eisai launched “CogMate” (product name in Japan: “NouKNOW”, non-medical device), a digital tool for self-assessment of brain performance (brain health), in Taiwan and Hong Kong. ○ In March 2022, the existing collaboration agreement on aducanumab with Biogen has been amended. Effective as of January 1, 2023, Eisai will receive a tiered royalty based on net sales of ADUHELM rather than sharing global profits and losses. Eisai’s share of expenses capped at an agreed amount for the costs related to development, commercialization and manufacturing of ADUHELM for the period from January 1, 2022, to December 31, 2022. Effective immediately Biogen’s existing final decision-making rights on ADUHELM have converted to sole decision making and commercialization rights worldwide. Regarding lecanemab, Eisai continues to serve as the lead of development and regulatory submissions globally with both two companies co-promoting the product based on Eisai’s final decision-making authority while supply agreement was extended to 10 years from 5 years for commercial manufacturing by Biogen. ○ In March 2022, Gilead Sciences K.K. (Tokyo) obtained an approval of Jyseleca (filgotinib), a JAK inhibitor, for the treatment of patients with active moderate-to-severe ulcerative colitis with an inadequate response to conventional therapies. Gilead Sciences K.K. and EA Pharma, which has been commissioned by Eisai, will co-promote the product. ○ In March 2022, Eisai acquired majority of the shares issued by Arteryex Inc. (Tokyo), a company that plans and develops software related to digital solutions such as provision of medical information platforms, through purchase of shares and subscription of a third-party allocation of common shares, and made it a subsidiary. ○ In March 2022, Eisai revised business alliance and ended marketing of the vascular embolization device DC Bead (specially controlled medical device). ○ In April 2022, Centers for Medicare and Medicaid Services (CMS) has announced the finalized National Coverage Determination (NCD) for monoclonal antibodies directed 14against amyloid for the treatment of Alzheimer’s disease (AD) and decided to cover treatments receiving accelerated approval based upon evidence of efficacy from a change in a surrogate endpoint only if patients are enrolled in a CMS-approved randomized controlled clinical trials. At the same time, CMS has committed to quickly reconsider the NCD for treatments which have obtained full approval with quality evidence on clinical benefit. 152) Outlook for the Future (April 1, 2022 – March 31, 2023) [Consolidated Financial Forecast] (Percentage figures show year on year change) Revenue Operating profit Profit for the year Profit before income taxes (¥ million) (%) (¥ million) (%) (¥ million) (%) (¥ million) (%) (¥ million) (%) 700,000 Fiscal Year * Assumptions: 1 USD = ¥125.0, 1 EUR = ¥130.0, 1 GBP = ¥151.5, 1 RMB = ¥19.0 55,000 55,500 46,500 -7.4 2.3 1.9 Profit for the year attributable to owners of the parent Earnings per share attributable to owners of the parent (basic) (¥) 1.7 45,500 -5.1 158.85 〇 In pharmaceutical business, revenue is expected to be same level as that of in the previous fiscal year by absorbing the impact of drug price revision in Japan and expiration of the business alliance for Lyrica, through steady growth of global brands Lenvima, Fycompa and Dayvigo. On the other hand, in other business, license revenue such as milestone payments to be received from partners will decrease compared to that of in the previous fiscal year. As a result, revenue is expected to be ¥700.0 billion (down 7.4% year on year). 〇 Revenue for Lenvima, Halaven, Fycompa and Dayvigo is expected to be ¥218.0 billion (up 13.3% year on year), ¥38.0 billion (down 3.5% year on year), ¥37.5 billion (up 17.7% year on year), and ¥27.0 billion (up 64.2% year on year), respectively. 〇 Regarding expenses, the Company will ensure efficiency based on financial discipline and thoroughly allocate resources for medium- to long-term growth. In terms of R&D expenses, the Company will further focus its resources on dementia area which includes lecanemab, and oncology area by revising its R&D structure and development themes. In terms of selling, general and administrative expenses, the Company will efficiently invest resources into global brands such as Lenvima and Dayvigo. Also, the Company will continue to promote preparation of market environment aiming to contribute to patients with lecanemab. Operating profit is expected to come to ¥55.0 billion (up 2.3% year on year) through implementation of above-mentioned efficient operations and decrease in shared cost related to aducanumab following the amendment of collaboration agreement on Alzheimer’s disease treatments. 〇 Profit for the year attributable to owners of the parent is expected to come to ¥45.5 billion (down 5.1% year on year) and five-year average ROE (Return on Equity) of 10% level is expected to be achieved. 163) Basic Policy on Profit Appropriation and Dividend for Fiscal 2021 and 2022 At the Company, the dividend payments are determined by a resolution of the Board of Directors as specified in the Company’s Articles of Incorporation. The Company has set the year-end dividend for FY 2021 at ¥80 per share as previously projected. With the interim dividend of ¥80 per share, the Company intends to pay the total dividend of ¥160 per share for the year (the same amount as the previous fiscal year). In this context, the Dividends on Equity (DOE) ratio is 6.3%. The annual dividend for FY 2022 (the fiscal year ending March 31, 2023) is expected to be ¥160 per share (¥80 for interim and ¥80 for year-end dividend), the same amount as FY For further information on the Company’s dividend policy, please refer to “2. Management Policy 3) Basic Policy for Capital Strategy (2) Sustainable and Stable Shareholder Returns” on pages 2021. 20-21. results. strengths. 2. Management Policy 1) Corporate Mission The Group defines its corporate philosophy as “Giving first thought to patients and their families, and to increasing the benefits that health care provides.” Guided by this philosophy, all directors, corporate officers and employees aspire to meet the various needs of global health care as representatives of a “human health care (hhc) company” that is capable of making a meaningful contribution under any health care system. The Group’s mission is the enhancement of patient satisfaction. The Group believes that revenues and earnings will be generated by fulfilling this mission. The Group places importance on this sequence of placing the mission before the ensuing Translating this hhc philosophy into action, the Group is committed to deepening the relationships built on trust with its principal stakeholders, namely patients and customers, shareholders, and employees, while continuously ensuring compliance with applicable laws and ethical standards, thereby enhancing corporate value. The Company codified this corporate philosophy into its Articles of Incorporation and endeavors to share its basic concept with shareholders. Based on hhc philosophy, the Group seeks to effectively realize social good in the form of relieving anxiety over health and reducing health disparities through partnership leveraging one another’s 2) Medium- to Long-term Corporate Management Strategy and Issues that Need to be Addressed As the super-aging of society progresses not only in industrialized nations but also globally, the structure of the healthcare industry, including pharmaceutical companies, is undergoing significant changes under the innovation taking place in AI and other digital and network technologies. It is shifting from the conventional model with a coherent supply chain to a horizontal division of roles among various players that include start-up companies. To deal with such changes, the Group launched “EWAY Future & Beyond” in April 2021 – a new medium-term business plan that follows “EWAY Current”, which commenced in FY 2016. 17(1) Medium-Term Business Plan “EWAY Future & Beyond” In “EWAY Future & Beyond”, the first five years starting in FY 2021 is “EWAY Future”, while FY 2026 onward is “EWAY Beyond”. The most important stakeholders to whom Eisai contributes will be expanded from “patients and their families” to “patients and the general public”. In line with our desire to empower patients and the general public to “realize their fullest life,” we will promote creating solutions based on scientific evidence in the areas of our expertise: neurology and oncology. Through these activities, the Group will effectively realize social good in the form of relieving anxiety over health and reducing health disparities. In May 2022, Eisai issued the hhceco Declaration aiming to evolve into the “hhceco” (hhc philosophy + ecosystem) company that empowers people to “realize their fullest life,” from time that they are in good health up to the final moments of their lives. It is the Eisai Universal Platform (EUP) which will be the core for the achievement of hhceco. The EUP consists of two layers — R&D&I (Research & Development & Incubation) and SP&D (Solution Package & Delivery). R&D&I has roles of creating new medicines through inclusion of C&I (Collaboration & Incubation), which is collaboration with academia and venture companies, and generating data that brings clinical data and biomarker data. The various solutions created based on this data are packaged according to people’s anxieties, and delivered to people whom Eisai is contributing to through its unique apps, sales activities and networks of other industries. Solutions created by EUP will bring significant synergies to other industries and by utilizing EUP, it will be possible to improve the sophistication of products and the quality of services provided by other industries and we will continue to provide new value to people whom each industry contributes to. (2) Major Progress and Initiatives under Medium-Term Business Plan “EWAY Future & Beyond” As for R&D under “EWAY Future & Beyond”, through the evolution of biomarkers, we will shift from diagnosis based on symptoms and/or tumors to disease continuum analysis based on pathophysiology, and we will aim for the provision of precision medicine. Specifically, in regard to Alzheimer’s disease (AD), we will realize continuous brain health panel diagnosis, which makes quantitative and over time measurements of pathophysiological biomarkers for a precise diagnosis of each person’s stage within the disease continuum and aim to realize appropriate treatment in which drugs are determined based on precise diagnosis. Meanwhile, in the area of oncology, we aim to achieve early diagnosis based on genome information and realize individualized medicine that enables selection of the optimal treatment method for each patient by obtaining an even deeper understanding of cancer evolution through the continuous DNA analysis of the circulating tumor cells in the bloodstream, and next-generation DNA sequence analysis. (a) Neurology Area In the area of neurology, new drug development targeting the AD continuum is currently underway. Regarding the anti-amyloid β antibody aducanumab, following the amendment to the collaboration agreement on aducanumab with Biogen in March 2022, effective as of January 1, 2023, Eisai will receive a tiered royalty based on net sales of ADUHELM rather than sharing global profits and losses. As for the anti-amyloid β protofibril antibody lecanemab, Eisai 18continues to serve as the lead of development and regulatory submissions globally and will co-develop lecanemab with Biogen under the final decision-making authority by Eisai. With the new alliance scheme, we aim to maximize the value of both ADUHELM and lecanemab by more effectively focusing the resources of Biogen and Eisai. In the United States, based on the results of Study 201 (Phase II study), a rolling submission to the U.S. Food and Drug Administration (FDA) of a Biologics License Application (BLA) for lecanemab for the treatment of early AD was initiated in September 2021. The application has been completed in May 2022 and we are aiming to obtain accelerated approval in 2022. The primary endpoint data from ongoing Clarity AD (Phase III study) for the treatment of early AD is expected in the fall of 2022 and Eisai positions the Clarity AD study as a confirmatory trial, and expects to submit for full approval of lecanemab in the United States during FY 2022. In Japan, Eisai has initiated a submission to the Pharmaceuticals and Medical Devices Agency (PMDA) of application data under the prior assessment consultation system for leacanemab in March 2022. Based on the results of the Clarity AD study, Eisai aims to file for the manufacturing and marketing approval in Japan during FY 2022. AHEAD 3-45, a Phase III clinical study for preclinical (asymptomatic) AD is also currently underway. In addition, joint development with Sysmex Corporation (Hyogo, Japan) is in progress for amyloid β blood tests that enable a simpler diagnosis of AD. Development of other projects based on the AD continuum are also in progress. The Tau NexGen Study (Phase II / III), conducted by the Dominantly Inherited Alzheimer Network Trials Unit (DIAN-TU) to evaluate the efficacy of anti-microtubule binding region (MTBR) tau antibody, is ongoing in the United States. E2814 was selected in the clinical study for Dominantly Inherited AD as the first investigational medicine among anti-tau drugs, and lecanemab was selected as the background anti-amyloid agent in the same study. A Phase II clinical study of E2814 targeting sporadic AD is being planned. Phase I clinical study for E2511, the selective Tropomyosin receptor kinase A (TrkA) synapse binding regenerant which is expected to help the restoration of damaged cholinergic nerves to functional neuron and prevent the degeneration of cholinergic nerves, is underway. In Japan, the Eisai-Keio Innovation Lab for Dementia (EKID) research focuses on discovery of novel drug targets related to maintenance and enhancement of the brain’s robustness and protective mechanisms. (b) Oncology Area Approvals have been obtained globally for the anticancer agent Lenvima for the treatment of thyroid cancer, hepatocellular carcinoma, thymic carcinoma, renal cell carcinoma and endometrial carcinoma. Of these, Lenvima in combination with the anti-PD-1 antibody pembrolizumab from Merck & Co., Inc., Rahway, NJ, USA has been approved for the treatment of renal cell carcinoma and endometrial carcinoma in Japan, the United States, Europe, Asia and others. Thus, efforts to maximize the value of Lenvima are progressing steadily. Currently, clinical studies (LEAP studies) for the combination therapy of Lenvima and pembrolizumab are underway for obtaining additional indications in more than 10 different tumor types. Development of novel fibroblast growth factor (FGF) receptor selective tyrosine kinase inhibitor E7090 is progressing, as an agent against resistivity related to the combination therapy of Lenvima and pembrolizumab. Furthermore, the CBP/β-catenin inhibitor E7386, which is expected to inhibit Wnt signaling pathway that is involved in the development of cancer, has 19achieved the clinical POC (Proof of Concept). Phase I/II clinical trials of E7386 plus pembrolizumabs are currently underway. Regarding MORAb-202, the next-generation antibody drug conjugate (ADC) which conjugates the approved anticancer agent eribulin, Eisai entered into an exclusive global strategic collaboration agreement with Bristol-Myers Squibb in June 2021 for the co-development and co-commercialization of the agent as a treatment for low sensitivity related to cancer immunotherapy, and co-development of the agent is underway. Development of selective estrogen receptor antagonist H3B-6545 is also underway. Furthermore, we are proceeding with the development of new next-generation pipelines, such as protein degradation inducing agents and neoantigen inducers, through joint R&D that is merged with external technologies. (c) Eisai Universal Platform (EUP) Based on the Disease Continuum concept, we pursue creating a variety of solutions to empower people in the daily living and medical domains to “realize their fullest life”. Expected solutions include the followings: in the areas of daily living (before the onset of disease), solutions for maintaining and supporting good health, disease awareness and prevention, checkups and hospital searches; in the medical field (at the onset of disease, during treatment, and after the prognosis), solutions for accurate diagnosis and confirmation of the effectiveness of treatments (drug and non-drug treatments) as well as measures that will contribute to improving quality of life. As the specific initiatives, we are collaborating with other companies for expanding contents of dementia-related services in the tele-communication industry and the food industry, developing insurance products in the insurance industry, providing disease risk information and alerts that potentially contribute to solving financial gerontology issues in the financial industry, predicting the risk of Mild Cognitive Impairment (MCI) and alerting based on driving recorder data in the automobile industry, and promoting projects by local governments for disease prevention. 3) Basic Policy for Capital Strategy The Group’s capital strategy policy is to improve shareholder value based on “medium- to long-term Return on Equity (ROE*1) management”, “sustainable and stable shareholder returns” and “value-creative investment criteria for growth”, while maintaining the integrity of its finances. (1) Medium- to Long-term ROE Management The Group believes that ROE is an important indicator of the sustainable creation of value for shareholders. In terms of medium- to long-term ROE management, the Company aims for an ROE that exceeds the cost of capital (creation of a positive equity spread*2) by constantly improving profit margins, financial leverage and asset turnover in the medium- to long-term. (2) Sustainable and Stable Shareholder Returns In terms of shareholder returns, profits are returned to all shareholders in a sustainable and stable way based on factors such as a healthy balance sheet and comprehensive consideration of the consolidated financial results, Dividends on Equity (DOE*3) and free cash flow, as well as 20taking into consideration the signaling effect. Because DOE indicates the ratio of dividends to consolidated net assets, the Group has positioned it as an indicator that reflects balance sheet management, and, consequently, capital policy. Acquisition of treasury stock will be carried out appropriately after factors such as the market environment and capital efficiency are taken into account. The Group uses the ratio of equity attributable to owners of the parent and net debt equity ratio as indicators to measure a healthy balance sheet. (3) Value-Creative Investment Criteria for Growth To ensure that strategic investments create shareholder value, the Group invests selectively using its Value-Creative Investment Criteria based on Net Present Value and the Internal Rate of Return spread using a risk-adjusted hurdle rate. *1 ROE = Profit attributable to owners of the parent / equity attributable to owners of the parent *2 Equity spread = ROE – Cost of shareholder capital *3 DOE = Dividends paid / equity attributable to owners of the parent 4) Enhancing Non-Financial Value including ESG and Information Disclosure Eisai believes that the value of a company is a combination of financial value and non-financial value, including environment, society, and governance (ESG). While engaging in business with the hhc philosophy at the core, the Group has been strengthening its ESG-related efforts such as reducing the impact on the global environment (environment), improving access to medicines, respecting of human rights and developing human resources (society), and ensuring fairness and transparency of management (governance). In addition, the Group positions these efforts as consistent with the Sustainable Development Goals (SDGs), which are international goals adopted by the United Nations (UN) Summit. Among ESGs, in particular, Eisai considers making efforts to resolve the global issue of access to medicines to be its duty as well as a long-term investment for the future. Eisai is promoting such efforts proactively under public-private partnerships with governments, international organizations, private non-profit organizations and others. For the elimination of lymphatic filariasis, one of the NTDs endemic in developing and emerging countries, the Group is providing lymphatic filariasis treatment diethylcarbamazine (DEC) tablets to the World Health Organization (WHO) for price zero (free of charge). These DEC tablets are manufactured at the Group’s Vizag Plant in India. The Group will continue to supply DEC tablets until lymphatic filariasis is eliminated in all endemic countries that need DEC tablets. As of the end of March 2022, 2.05 billion tablets had been supplied to 29 countries. Furthermore, the Group is carrying out new drug development and generation of new evidence to eliminate tuberculosis, malaria and NTDs such as mycetoma under the partnership with the Japan-based Global Health Innovative Technology (GHIT) Fund, and NPOs and NGOs with extensive experience in drug discovery related to NTDs. The Group is also supporting activities to raise awareness and enable early detection of non-infectious diseases, such as dementia and cancer. Affordable pricing, which makes it easier for patients to purchase medication, and tiered pricing, which sets prices according to income levels, are also being implemented as part of activities carried out by the Group to improve access to medicines around the world. 21Regarding the environment, Eisai has set a scientific-based greenhouse gas reduction target for FY 2030 and obtained approval from the Science Based Targets (SBT) initiative. In addition, the entire Group is actively working for the formation of a low-carbon society with initiatives such as systematically increasing the rate of renewable energy. Also, Eisai set a medium-term goal of switching all electricity used by the entire the Group to renewable energy in 2030 and a long-term goal of aiming to achieve carbon neutrality which results in no net release of carbon dioxide into the atmosphere by balancing greenhouse gas emissions and its absorption in 2040, and created a road map to achieve these goals. Furthermore, the Group is analyzing based on the TCFD (Task Force on Climate-related Financial Disclosure), an international framework for analyzing the risks and opportunities of climate change impacts on companies and seeking information disclosure, and is constantly investigating how to strengthen the Group’s climate strategy. Regarding human rights, the Group has been working on further to improve non-financial value by creating a human rights policy and constructing a human right due diligence mechanism based on the United Nations “Guiding Principles on Business and Human Rights”, which is internationally recognized as a guideline. Information regarding non-financial value of the Group, including ESG, is disclosed in the Value Creation Report (former Integrated Report) and Environmental Report, based on the framework of the IIRC (International Integrated Reporting Council). https://www.eisai.com/ir/library/annual/index.html The Company is always aiming for the best corporate governance and strives continually for its enhancement. The Company’s corporate governance initiatives, including the Corporate Governance Report, are posted on its website. https://www.eisai.com/company/governance/index.html 5) Compliance and Risk Management The Group defines “compliance” as the observance of the highest legal and ethical standards and positions it at the core of its management activities. In addition, the Group defines “internal control” as the systems and processes that are constructed and operated within the company in order to carry out its business act