Nxera Pharma Co., Ltd. (4565) Earnings Call Transcript

Time has come. So we will now begin the financial results briefing of Nxera Pharma for the first half of FY 2025. Thank you very much for taking time and your busy schedule to join us today. I'm Nomura, CFO, and I will be the moderator. Today, we have Chris Cargill, CEO; and Dr. Matt Barnes, CSO and President of Nxera U.K. [Operator Instructions] . Today, we will explain, as always, the progress of our business using the material in the first half, followed by Q&A session in the second half. The presentation materials will be shown on the screen and are also available on our website. If you want a copy, please enter from the News tab on the website on the left side and access the financial results material. [Operator Instructions]. So we will start the briefing Chris will first explain the operational highlights, then I will explain the first half results in Japan and APAC commercial business, followed by Matt on R&D progress, mainly in the U.K. And finally, Chris will explain our FY 2025 goals and medium- to long-term objectives. Please turn to Page 5 of the presentation. Chris, the floor is yours.

Fantastic. Thank you, Nomura-san, and good afternoon, everyone. I'm Chris Cargill, CEO of Nxera Pharma. Thank you for joining us today for our Q2 2025 results presentation. On Slide 3, I'll begin by walking you through our operational highlights, and then I'll pass you over to Nomura-san for our financial results and Japan and APAC commercial updates. Lastly, Matt will take us through key progress from our R&D business in the U.K., and I'll finish with a strategic outlook for FY 2025 and beyond. So I'm on Slide 5 now. Firstly, let me briefly recap our priority objectives for the full year. So our first objective is to exceed JPY 17 billion in sales for our two key products, PIVLAZ and QUVIVIQ. I'm pleased to say that our commercial performance is on track to meet this objective following a successful first half of the year for PIVLAZ and the inclusion of QUVIVIQ, which is progressing well with our partner, Shionogi. For our second objective, we are in active discussions with a number of partners regarding in-licensing late-stage assets for our Japan and APAC business, and I look forward to sharing more progress later on this year. Similarly, for objective 3, our business development discussions continue to progress with a range of potential biotech and pharma partners. And we are also expecting very shortly to start a Phase IIa study of our wholly owned EP4 antagonist, NXE’732, and that's together with Cancer Research U.K. We're making great progress against our fourth objective as we continue to invest in optimizing our internal business systems. And regarding the final objective, we continue to push the GPR52 agonist program forward, and we'll be able to provide an update later this year regarding the time line for the expected Phase Ib data readout that will support the option exercise decision. So we're focused on prioritizing and accelerating key programs in attractive commercial markets that will create long-term value. And for example, this week, we revealed the launch of our comprehensive obesity and chronic weight management pipeline. Now please turn to Slide 6. Now the first half of this year has seen great progress across our core businesses where we remain extremely productive. We enriched the management team with new external directors and a new Head of IR to enhance transparency and communication with shareholders, particularly in Japan. We simplified our governance structure in Japan, streamlining MPJ structure to a single representative directive -- representative director, sorry, Mr. Toshi Maeda. And in our U.K. R&D business, we've hit several pipeline inflection points. So TMP-301, which is our mGlu5 negative allosteric modulator program, partnered with Tempero Bio is a substance for use disorder and it entered Phase II. NBI’568, our partnered M4 agonist with Neurocrine entered a Phase III study for schizophrenia. And ORX142, our second OX2 agonist, partnered with Centessa initiated a Phase I study. As I mentioned, we also announced seven new proprietary obesity programs, building out our metabolic disease portfolio, which we will provide further detail on later in this presentation. Now Pfizer discontinued development of PF-522 following a portfolio decision, but we intend to enter discussions with Pfizer regarding potential opportunities to advance GLP-1 molecules discovered through this collaboration. Our Japan and APAC business is seeing great progress. On the commercial front, as I mentioned, PIVLAZ remains the clear market leader for the prevention of cerebral vasospasm in Japan where sales continue to grow. And following our agreement with Holling for daridorexant in Taiwan, launch plans are underway for that product in that market from mid-2026. We also assigned the rights for Cenerimod in Japan and APAC to Viatris. And in Korea, we're now exploring non-reimbursed access pathways for PIVLAZ following our decision to withdraw from drug price negotiations in Korea. Please turn to Slide 7, please. And as you can see on this slide, we have a broad and balanced innovative pipeline targeting some of the biggest areas of unmet medical need across three key therapeutic areas: metabolic disease, neurology and immunology/GI. Nxera Pharma is well advanced in its mission to accelerate innovative medicines to patients and become one of the leading players in Japanese pharmaceuticals. With two recently launched products driving stable top line sales growth plus a pipeline of innovative clinical stage programs, the risk and reward is very attractive. We have the upside potential of a biotech company, but we have the diversification of a commercial pharma business. Please turn to Slide 8. So earlier this week, we formally launched our broad new pipeline of programs targeting obesity and chronic weight management. Essential to this pipeline is our new wholly owned oral small molecule GLP-1 agonist program, and this is complemented by six additional innovative programs targeting the GIP, Amylin and Apelin receptors. The obesity field is undergoing a shift towards oral therapeutics, and that's driven by patient demand, real-world practicalities and payer pressures. And so our internal pipeline was designed to meet this rapidly emerging need. And as shown here, we are one of the few players in active development across all four of these mechanisms, offering significant opportunities beyond the current GLP-1 space. For example, Amylin agonists are likely to play a huge part in the emerging treatment landscape for preserving muscle in weight loss. And we're confident that we can achieve significant progress over the midterm, delivering clear value for shareholders and patients in a rapidly expanding obesity market. So I will now pass over to Nomura-san, who will take you through our financial results for the first half of the year and also our commercial performance in Japan. Thank you, Nomura-san.

Chris, thank you very much. Now I would like to present a summary of the financial results and some promotional activities. Slide 9 here, we present a summary of the financial results for the first half of 2024, along with the trends from previous periods, As shown at the top net sales increased by 19% year-on-year from JPY 127 billion, to JPY 150 billion. The increase was driven by growth in PIVLAZ sales, the addition of product supply and royalty revenues from QUVIVIQ, which were not present in the previous year and steady stream of milestone revenues as well. As shown in the lower section on operating profit, core operating profit for the first half of this year was JPY 0.3 billion compared to JPY 1.1 billion the same period last year. The reason behind this is, as I will explain in further detail on the next page, while our company may progress in reducing SG&A expenses, R&D expenses increased significantly primarily due to investments in compounds under development currently in clinical trials. The difference between core operating profit and operating profit under IFRS narrow due to the reduction in accounting-wise or one-off expenses related to acquisition of Idorsia, which were significant last year. Moving on to Slide 10. Here, we show the breakdown by business domain and by core operating income and operating income in accounting terms. In the platform business on the far left column, which is a biotech venture-type business model. Both SG&A and R&D expenses have increased, but the increase in R&D expenses is primarily due to investments in clinical trial stage product as mentioned earlier. Regarding SG&A, in addition to natural increases, IT investments that were previously classified as one-off expenses have been reclassified into the core section after one year following the acquisition, resulting in an increase in core operating loss of approximately JPY 300 million. Next, second from the left, the commercial business, which is a pharmaceutical type business model. So steady growth in both PIVLAZ and QUVIVIQ sales, while SG&A was streamlined, resulting in a core operating profit approximately JPY 3.3 billion with a net of JPY 3.3 billion and JPY 3 billion, the consolidated core operating profit was a positive JPY 0.3 billion. Going forward, the company will continue to invest in future growth while maintaining efficiency aiming to achieve profitability on a core basis or more specifically, on a cash flow basis, that is going to be our immediate financial goal. Moving on to the next slide. Here, we present our forecast for R&D expenses and SG&A expenses for the fiscal year ending December 2025, I think you are familiar. No changes from the previous forecast. Regarding R&D expenses, if we take the midpoint of the median of the range is JPY 13 billion and JPY 7.4 billion of approximately 60% has already been spent in the first half. Considering the costs tend to be heavier in the second half of the year, usually, it may appear that we could be exceeding the upper limit of the range you may think however, the costs associated with the largest clinical trial peaked in the first half of this year. So they have already been picked out so we expect them to remain within the target range. Regarding SG&A, we had anticipated flat year-on-year. But as you can see from the first half results, they are in line. I will also briefly explain the Japan APAC business. Please turn to Slide 14. PIVLAZ net sales are growing steadily, and our market share remains high at 73%, although it is slightly below the maximum target of 75% for this fiscal year. Looking at Q2 alone, we are in line with our 7% full year growth target with growth of 9% year-on-year and 7% year-to-date for the first half of the year. Although we cannot expect as large a growth as we have been seeing in the past, we will continue to carefully promote the product and maximize value while striving to streamline our SG&A expenses, which I mentioned earlier in the consolidated financial results. Next, Slide 15. As you know, Shionogi is responsible for sales of QUVIVIQ, so I will refrain from going to details. But we recognize that activities for future growth are progressing steadily and to the greatest extent possible even with the 2-week prescription restriction. The 2-week prescription limit will be lifted in December this year, one year after launch. Looking at the DORA market, Dayvigo continues to have the largest market share, followed by Belsomra. But we are happy to see that DORA as a category is growing steadily as expected in the insomnia treatment category. Next, please turn to Slide 16. We sometimes receive questions about QUVIVIQ's profit structure, so I will explain one slide here. The left side shows net sales. Shionogi sells the drug. So naturally, product sales are directly translated into their net sales. We, on the other hand, receive slightly lower sales as product supply and royalties. Our profit structure is shown on the right side. Currently, we do not make any profit from product supply, as we supply the products to Shionogi at the purchase price. So royalty is our only profit. The cost reduction project is progressing well, and we expect that from now on, specifically from 2027 onward, we will gradually benefit from the supply of our products and improve our profitability. Please turn to Slide 18. So this shows the sales target of PIVLAZ and QUVIVIQ in FY 2025, which has been showing since the beginning of the year, and there are no changes. I'm sorry that this is slightly different from the previous slide. Regarding QUVIVIQ, as shown on Slide 16, the medium- to long-term profit structure is explained but this is the first year of its launch and the product supply associated with the initial shipment is very large, making this an irregular year for us. Specifically, our sales are higher because we supply products to Shionogi ahead of time. From next year onward, we plan to move closer to the structure I just described. That concludes my brief summary and consolidated financial results in Japan and APAC Commercial business. Matt will now give an R&D update. Matt, please.

Yes. Thank you, Nomura-san. So next slide, please. So while many of the milestones have already been covered by Chris. I want to briefly underscore the scientific and clinical progress we've delivered across the first half of the year. We've made significant progress with our internal pipeline, including the previously announced seven, established proprietary obesity programs, and I will go into more detail shortly. We also achieved an undisclosed development milestone as part of our multi-target metabolic collaboration with Lilly, a key validation of our approach to targeting metabolic disease and diabetes related diseases. In the clinic, our NxWave enabled programs continue to move forward with purpose. We received a $4.8 million milestone from Centessa for the ORX142 program, which is a second OX2 receptor agonist progressing from our platform into Phase I clinical trials. And Tempero Bio initiated a Phase II trial for TMP-301 in alcohol use disorder, and Neurocrine advanced NBI’568 with both new Phase II data and the initiation of Phase III trial in schizophrenia, triggering a $15 million milestone. So taken together these events highlight how our investments in science and technology are translating into meaningful clinical progress and value creation. Please turn to the next slide. So just to take a moment to outline what this NxWave platform is. So this is our proprietary structure-based drug design platform. And it's the key reason behind our proven pipeline impact and why we believe we will still succeed in delivering innovative high-impact medicines across our portfolio. From target identification through to translational medicine NxWave enables a fully integrated, highly rational drug discovery cascade. Each module from NxStaR to NxHit to NxDesign is designed to drive precision and selectivity and ultimately higher probability of success. This Is not a theoretical capability. We are seeing it translate directly into pipeline output. We've generated 29 preclinical candidates and today, 15 of which are active, and including 11 in Phase I, 4 in Phase II and our first Phase III validation of the platform with NBI’568. So critically, this platform is now being directed towards some of the most pressing unmet needs including a new wave of metabolic programs where selectivity, safety and mechanism-based design are absolutely essential. Please turn to the next slide. So Chris touched on this previously, but we believe there's a significant opportunity to build a differentiated position in the metabolic space. Our NxWave platform is the foundation for doing just that. So as I mentioned, you already heard Chris talk about the breadth of targets forming our priority pipeline. These include GIP, Amylin, Apelin and of course the GLP-1. So if we use GLP-1 as an example, I will describe the strategy and capabilities we will use across these emerging programs. So if we look at the current landscape of GLP-1 receptor agonist, it's clear that peptides dominate. Small molecules are still underrepresented, particularly in the later stages with only a handful reaching Phase III. And even within small molecules, the chemical diversity is very narrow. Nearly all the current efforts fall into just two tumour types. So the orforglipron-like or the danuglipron-like structures. And both of these come with significant challenges, synthetic complexity, safety flags and manufacturing risks. Our platform gives us a path beyond these limitations. So with NxStaR, we can stabilize complex targets like GLP-1 for DNA encoded library screening, something few others can do, and our proprietary small molecule library and structure-guided design tools through NxHit and NxDesign allow us to explore entirely new chemical space. As many of you know, critically, our team is the first to solve the structure of GLP-1 receptor bound to a peptide agonist. And it's this structural insight and the structural insight we have over more than 60 individual GPCR targets, which we are using as part of our structure-based drug design approach. So NxWave now empowers us to develop the next generation of best-in-class oral drug candidates in this space. Next slide, please. So we're showing how our platform can generate differentiated small molecule candidates in this space. The market is clearly signaling just how valuable these candidates could be. So even just over the last year, we've seen several major preclinical state deals in the GLP-1 small molecule space, each with potential deal sizes nearing or exceeding $2 billion and significant upfront payments ranging from $100 million to $200 million. Oral delivery is not just about convenience. It expands therapeutic reach. It supports long-term weight maintenance, enables treatment obesity linked comorbidities and opens new options for vulnerable or underserved populations such as the elderly post menopausal or sarcopenic patients. It also opens the door to combination approaches, which require design flexibility, something our NxWave platform is uniquely positioned to deliver. So in short, the NxWave of obesity treatments will be oral safe and scalable, and we are ready to lead in this space. Next slide, please. Now turning to some of our strategic collaborations. So this one is with Neurocrine Biosciences. Next slide. Yes. So this continues to be the cornerstone of our progress in CNS therapeutics. Neurocrine now have one of the most comprehensive muscarinic receptor agonist portfolios in the industry. The lead program, NBI’568, a selective M4 agonist has completed Phase II schizophrenia with Phase III initiated in June. In addition, a new Phase II study in bipolar mania is planned for the second half of this year. Neurocrine also continues to advance further assets in this suite of muscarinic programs. NBI-570, a dual M1/M4 agonist is progressing through Phase I, with plans to initiate Phase II trials in schizophrenia later this year. NBI’567, the M1 selective agonist and NBI’569, an additional preferring M4 selective candidate are both in Phase I with readouts expected also in 2025. Each of these programs was designed using our NxWave platform to deliver highly selective orthosteric agonist, targeting cognitive and psychiatric symptoms with precision while avoiding the off-target effects and co-operativity requirements that have limited others in this space. So taken together, this portfolio puts Neurocrine in a leading position to redefine how schizophrenia, bipolar and other neuropsychiatric conditions were treated. So let's take a deeper dive into NBI’568 and look at some of the data. Next slide, please. So just starting with the Phase III design. So this is, as I mentioned, now in Phase III, so this is the first and only highly selective orthosteric M4 agonist to reach this stage, offering a fundamentally new approach. The study design is simple. A 5-week double-blind study evaluating once-daily dosing of 20 milligrams of NBI’568 versus placebo in a 1:1 randomization in adult in-patients with schizophrenia. The first of these studies began in May and June with a second study planned for a Q3 start late this year. Compared to other M4 assets, NBI’568 stands apart because it offers high subtype selectivity targeting only M4 and does not require endogenous acetylcholine for activation. That gives you potential advantages in both consistency of response and therapeutic window. It also introduces convenience because of the once a day daily dosing with or without food, which could be a meaningful differentiator in the real-world use. So there's a large opportunity for NBI’568 not only in schizophrenia, but potentially in bipolar and other neuropsychiatric conditions. Let's look at the next slide please, which highlights the Phase II top line data. So these results were highly encouraging. So the 20-milligram once-a-day dose demonstrate both clinically meaningful and statistically significant improvement in PANSS scores as early as week 3 with a consistent separation from placebo through week 6. The placebo-adjusted difference at week 6 was minus 7.5%, with an effect size of 0.61, which is a strong signal in this population. Neurocrine also saw significant improvements on the CGI severity scale with a significant mean change of minus 1.2%, with just -- minus 0.5% for placebo. These improvements extended to key symptom domain including positive and negative symptoms on the [indiscernible] subscales also. So taken together, these filings show not only statistically robust effects for a reproducible response across multiple endpoints, supporting Neurocrine's decision really to move into that Phase III study that I mentioned. Please turn to the next slide. One of the other strengths of NBI’568 is its favorable safety and tolerability profile. So in that Phase II study, NBI’568 showed rates of adverse events that were generally similar to placebo, particularly in critical areas such as gastrointestinal and cardiovascular side effects, which are known limitations for Cobenfy, where adverse events rates were 3 to 5x higher than placebo in thier Phase III EMERGENT trials. But like Cobenfy the NBI’568 does not require the co-administration with a peripheral muscarinic antagonist. Has no diet requirements and is dosed once daily, making it potentially more straightforward and convenient for patients and prescribers. While some expected CNS related events like somnolence and dizziness were observed. Importantly, there were no significant safety signals and domains, that typically drive treatment discontinuation. As the Phase III program progresses, this emerging safety and tolerability profile will be critical to NBI’568 potential positioning as a next-generation therapy for schizophrenia. Next slide, please. So now just turning to another partnership with Centessa Pharmaceuticals, which is advancing a differentiated portfolio of OX2 receptor agonist targeting sleep and neurological disorders. The lead asset, ORX-750, continues to make progress in Phase II. This is a randomized placebo-controlled trial across three indications, NT1, NT2 and IH. The innovative clinical design ensures that all patients receive ORX-750 for at least four weeks, enabling optimized dose selection and efficient recruitment. Initial proof-of-concept data expected in the second half of 2025. In addition, as Chris mentioned, ORX-142, a second molecule has now entered Phase I trials, being developed for neurodegenerative disorders and also ORX-489 is progressing in preclinical development for neuropsychiatric disorder. So Centessa are building one of the most advanced pipelines in the emerging category of OX2 agonist therapeutics. And importantly, all of these three assets were discovered using our NxWave platform, highlighting its ability to generate highly selective CNS management, small molecules with real clinical benefit. Next slide, please. So this is a fast-moving area of therapeutic development, and we continue to follow closely given our partnership with Centessa, who are advancing ORX-750. Encouragingly, there has been positive signals from other OX2 receptor agonist programs, including TAK from Takeda and from Alkermes, which are right now reporting clinical data later this year. While it's difficult to compare these results directly across the study due to differences in the state -- the clinical stage in the population of the subjects and the duration. It's clear that ORX-750 shows promising early efficacy in the maintenance of wakefulness test, with a notable favorable side effect profile in healthy volunteers in the Phase Ib study. Which may provide a differentiated profile versus the competition. So we think that this positions ORX-750 well in an emerging competitive landscape and we remain confident in Centessa's continued development path and data maturation. Next slide, please. So this is the final slide on the collaboration all the partners. So this is turning our attention to Tempero Bio who have seen meaningful clinical progress with our mGlu5NAM, targeting Substance Use Disorders. So this is now in Phase II trials for alcohol use disorder with first proof-of-concept data expected before the end of the year. This will be a major milestone for the program and for the broader therapeutic class. In parallel, a Phase I trial in cocaine use disorder is also ongoing. That's expected to complete in the second half of this year, with plans to initiate a Phase II trial in this indication within the next 12 months. Tempero also continues to advance earlier programs for Methamphetamine and Polysubstance disorders backed by a recent $70 million Series B financing, Tempero is well positioned now to continue progressing these programs further into clinical development. Next slide, please. So now we're turning to our internal programs. So our in-house programs continue to advance with strong clinical momentum, and they're increasingly central to our long-term growth strategy. This pipeline spans three key therapeutic areas, neuroscience, oncology and immunology, positioning Nxera as a leading developer of next-generation oral small molecule therapies. NXE’149, currently in Phase Ib target schizophrenia by our novel GPL-52 agonist mechanism. NXE’732, our EP4 antagonist is being developed in combination with the PD-L1 blockade for solid tumors and NXE-744, a selective EP4 agonists in Phase Ib for inflammatory bowel disease. So across these programs, we're focused on break-through biology unmet patient needs and the consistent application of our NxWave to design oral selective and scalable molecules. So over the next few slides, I'll just share a little bit more detail on these programs. So turning to the next slide. Let's begin with NXE’149 in schizophrenia. So this is a first-in-class GPR52 agonist designed to treat the full spectrum of schizophrenia symptoms, from positive symptoms like hallucinations to cognitive impairments and negative symptomology. What makes this program unique as its dual mechanism potential. So this is based on its core expression with dopamine receptors in different parts of the brain, which really offers that broad spectrum of activity across positive, negative and cognitive symptomology. Phase Ib proof-of-mechanism studies remain ongoing, which includes pharmacodynamic measures to confirm target engagement in the brain. This study is expected to complete towards the end of this year. And given the continued unmet need for safer, more effective antipsychotics, particularly those avoid dopamine receptor modulation, we believe NXE’149 has a strong potential to reshape the treatment landscape. So next is -- the next slide is NXE’732. So this is a selective EP4 antagonist. Next slide, designed to enhance the efficacy of checkpoint inhibitors in solid tumors. So EP4 antagonist restores immunosurveillance surveillance by reversing tumor-mediated immunosuppression. This is expected to improve effected CD8 T cell infiltration and overall response to checkpoint inhibitors. We've now completed the Phase I dose escalation study, including both the monotherapy and combination arms with atezolizumab. No dose-limiting toxicities have been observed and pharmacokinetic and pharmacodynamic data strongly support progression. Target engagement has been confirmed at all dose levels and additional analysis, including paired biopsies to evaluate immune-cell infiltration is ongoing. Phase II recruitment is now ongoing in the U.K., focused on 4 tumor types: MSS colorectal cancer, gastric or gastroesophageal junction, adenocarcinoma, clear cell venous cell carcinomas and metastatic castrate resistant prostate cancer. All in combination with PD-L1 inhibition, and we will look forward to sharing some of the clinical data at the ESMO meeting in October. And then lastly, let's just turn to our third in-house program, NXE-744. So this is a first-in-class opportunity to treat IBD. Combining anti-inflammatory effects with direct support from mucosal healing, something that current immunomodulatory therapies do not address. Our Phase I studies, including single and multiple ascending dose cohorts have now completed with no concerning safety signals to date. We are currently enrolling a ulcerative colitis patient cohort to explore pharmacokinetics of this GI targeted asset and preparing to initiate an indomethacin challenge-based study in healthy volunteers to further explore mechanistic effects on mucosal integrity and inflammation. Biomarker analysis is underway and insights from our clinical advisory board are helping refine our clinical development strategy going forward. So as a GI targeted EP4 agonist with a clean safety profile and unique mechanism, we think that NXE-744 has potential to reshape how we treat IBD really through that promotion of mucosal healing. And with that, I will conclude and now hand back to Chris. Thank you, Chris.

Excellent. Thank you, Matt. Please turn to Slide 35. So as I went through earlier, these are our priority objectives for the remainder of the year, and we remain committed to delivering against these five key priorities. Please turn to slide 36. So our strategy targets three of the fastest-growing areas of health care. Neurology, metabolic disease and immunology/GI, where we believe there is still a huge unmet medical need. Our approach harnesses major GPCR target classes, muscarinic, orexin, incretin hormones as an example, and we do it via two Waves of clinical development and potential launch windows. So Wave 1, which is from the current day through to 2030. Programs that could launch commercially by that time frame 2030. And in Wave 2, the 2030 to 2035 time frame, these are programs expected to launch in that window. Now the value to Nxera Pharma in royalties and milestones could be transformative if even only 1 to 2 of these programs are successfully launched. Please turn to Slide 37. So by 2030, we aim to lead Japan's next year of medicine by building a high-growth, high-profit company that continually invests in areas of high patient need. Specifically, we're on track to hit JPY 50 billion in core revenue by FY '29 to 2030. And that's a 25% compound annual growth rate from our 2023 baseline. We aim, over the long term to achieve sustainable profitability, and we will unlock significant upside if only one or two of the Wave 1 product launches are successful, with the Wave 2 launches to support further growth into 2035 and beyond. Please turn to Slide 38. So looking ahead to the rest of the year, we've got a number of potential catalysts across our partnered and wholly owned portfolio. And our goal is to hit every catalyst on time, and we're confident that with our partners we will. So thank you for your time and the management team and I are now available for questions.

[Operator Instructions] Sakai-san of UBS Securities.

Sakai from UBS. I have two questions. Page 25, this looks familiar, M4 agonist Phase II. When Phase II data comes out. It was disappointing, should I say and concerning. I'm talking about this left-hand side line graph. week 5 to week 6, it's going up. So over the long term, is efficacy going to be sustained. That was the question raised. So what is your view? Is your view unchanged in Phase III? I looked at Neurocrine's data, but according to the protocol, this concern can be eliminated? Is that the thinking? May I turn to Matt for an answer as the concerns raised. If you could respond to that.

Yes. Thank you very much for the question. So yes, Neurocrine published this, you're right, it is a familiar data readout. So they've produced this or they presented it several times before. And actually to me, rather than any concern with any kind of rebound effect, which I think is what your question relates to. I'm actually more interested, I think, in the data at week 5 there, where actually there is a mean adjusted PANSS score of minus 10. And actually, I think that's -- these were all entirely significantly different from placebo from week 3, right? So week 3, 4, 5, 6. So I think to me, I'm less worried about any kind of issues around sustainability of response. I think over subsequent weeks there, you are seeing routine significant differences from placebo, and they have -- Neurocrine have moved forward with this 20-milligram dose. And just to remind you, the Phase III study, it will be focused in, with an endpoint of week 5 in that Phase III study rather than in week 6 here. So I don't really have any particular concerns about that going forward. Thank you for the question.

So shall we wait for Neurocrine result anyway?

Yes.

Going back to Japanese, Page 28. Alkermes data, some investors really disappointed. I guess that's because due to safety profile, the catalepsy, you think that was the major concern from this Alkermes Phase II trial? You don't -- I know you don't like to comment on the competitors' results, but this is a very, very interested category or therapeutic areas. So if you could give us some take, I really appreciate.

Thank you for the question. Yes. I mean I think this was -- this was asked at both Alkermes and Takeda's recent quarterly results as well around the catalepsy. I think, yes, we don't tend to comment on competitive results. You're right. But I mean, Alkermes I think, seem confident that they are at least seeing some efficacy on catalepsy at least at the, I think, the 8-milligram level, I think. And we haven't really seen actually a full data set yet from Alkermes and Takeda. So we've seen hints from the quarterly results and the press releases. They're both going to report full data sets at the World Sleep Conference in September. I think I'd really like to see those full data set before we make any sort of further comments, because I really want to see what Takeda's effect is on the catalepsy as well. And yes, so I think we'll just have to wait and see. But you're right to pull out catalepsy. So particularly with NT1 patients, this is a real problem. And I think that any molecule, we would really want to see benefits of catalepsy, in the data. But let's wait to see what September World Sleep Conference data looks like. And then, of course, with ORX-750, we're hoping to get some Phase II data from them in across these broad range NT1, NT2 and IH by the end of the year. So it's going to be really interesting to see whether there's some differentiation around catalepsy and other efficacy endpoints as well.

Thank you very much for the question. Pathology Associates [indiscernible]

Congratulations for you great quarter. I just have two quick business-related questions, and Firstly, Chris, I think you mentioned that you'll give an update on NXE’149 later in the half. So I don't want to -- I don't want to jump into that at the moment. But I was wondering are there any communications with BI at the moment? Any questions that they're asking? Are they active in the data room and so on, as well as are there any interest from other players regarding your GPR52 agonist?